Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

PRIVATE BUSINESS

KENT COUNTY COUNCIL BILL [LORDS] (BY ORDER) MEDWAY COUNCIL BILL [LORDS] (BY ORDER)

Orders for consideration, as amended, read.

To be considered on Thursday 22 March.

Oral Answers to Questions — HEALTH

The Secretary of State was asked—

Breast Cancer (Nottingham)

Mr. Vernon Coaker: What discussions he has had with Trent regional health authority about a new breast cancer unit at Nottingham city hospital. [151948]

The Minister of State, Department of Health (Mr. John Denham): The Trent regional office and the Nottingham health authority strongly support the scheme for a new breast care unit at Nottingham city hospital. It will replace the 23-year-old prefabricated accommodation with a new purpose-built unit. The local breast team is internationally recognised as being at the forefront of clinical care and research into the diagnosis and treatment of breast cancer. The regional office expects to receive the full business case by September this year, at the latest.

Mr. Coaker: Will my right hon. Friend take a personal interest in the development of the breast cancer unit at Nottingham city hospital? There has been some slippage over the past couple of years, so his intervention would be very welcome. As he said, this is an internationally renowned breast cancer unit, and many people come from abroad to see it. At the moment, it is housed in prefabricated buildings. Will my right hon. Friend take a personal interest in the matter and ensure that if September is the target date for the business plan, September is also the reality for Nottingham city hospital's breast cancer unit?

Mr. Denham: I will certainly take a personal interest in the matter, and I pay tribute to my hon. Friend for his keen interest in the success of the project. It is planned to

spend more than £5.2 million on it from different sources, and it is clearly in everyone's interest to get it under way as quickly as possible.

Mrs. Marion Roe: As one of the chairmen of the all-party breast cancer group, I welcome any new facilities for the new breast cancer unit at Nottingham city hospital. However, will the Minister tell the House what role clinical need plays in the treatment of patients who present to their general practitioners with suspected cancer? What response would he give to the president of the Royal College of Surgeons, who claims that clinics are being snowed under with inappropriate referrals for breast cancer because of the Government's two-week target?

Mr. Denham: The whole point is to ensure that patients with the highest clinical need are referred urgently to a consultant. The two-week waiting time is for urgent referrals. In support of that, we have published referral guidelines for use by general practitioners that have been drawn up with leading clinicians. The whole point is to enable general practitioners to identify women in need of an urgent referral. I believe that we have a policy that is designed and aimed to give the highest priority to those with the greatest need.

NHS Plan

Mr. Paul Burstow: What assessment his Department has made of the number of additional nurses required to meet the requirements of the NHS plan and enable private sector providers to comply with the Care Standards Act 2000 and regulations made thereunder. [151949]

The Secretary of State for Health (Mr. Alan Milburn): The NHS plan contains a commitment for 20,000 more nurses to be provided by 2004. Private sector providers are represented on the new local organisations charged with planning the numbers of nursing staff needed in local communities.

Mr. Burstow: The Secretary of State will know that about one in four nurses is due to retire in the next four to five years. The Royal College of Nursing, in its report last year, said that there would be a shortage of about 57,000 nurses over the next five years. Does the right hon. Gentleman accept, therefore, that increasing the number of posts in the NHS potentially increases the number of vacancies? Will he guarantee that in the effort to recruit more nurses, the international recruitment nursing director will not strip bare developing countries of their valued nurses? Will he also ensure that there will be a dramatic expansion of nurse training places in this country, so that we can grow our own nurses to fill the vacancies?

Mr. Milburn: That is precisely what is happening. It is true that nurse training places have been cut in the past; they were certainly cut under the previous Government in the mid-1990s. The number of nurses was cut in the mid-1990s, too. The national health service is still feeling the effects of that. However, the number of nurses is now consistently rising, the number of training places is up by one third, and the number of UK-based


applications for nursing and midwifery courses has increased by more than 56 per cent. in the past two years alone.

Mrs. Gwyneth Dunwoody: Will my right hon. Friend make it clear to the private sector that before it gets the same input of taxpayers' money that it got last year, it is essential that it complies with care standards? That is a question of the private sector having to come up to those standards not after new nurses have been trained, but before. That is a simple lesson that I would have thought would be in the interests of every patient.

Mr. Milburn: My hon. Friend is right: standards should be high wherever care is provided. That is particularly the case if the resources for that care, whether it is given in the private or the public sector, are provided at NHS expense. Standards are what count, which is why the action that we are taking to raise standards and to expand the number of nurses working in the NHS and the health care system overall is so important.

Mrs. Caroline Spelman: The RCN survey shows that 70,000 trained nurses are staying at home, but in his evidence to the Nurses and Midwives Pay Review Body the Secretary of State said:
The central message of the evidence from the Departments was that there was no case for a special pay response from us this year on grounds of recruitment and retention.
What changed his mind?

Mr. Milburn: The difference between this Government and the previous one is that we are paying nurses' pay awards in full, not staging them. Indeed, there is extra pay to address shortages in particular areas, so where need is highest, but where the cost of living is also the highest, we are paying extra money to nurses—up to £1,000 a year extra. There is more money for ward sisters. Last year, there was more money for staff nurses. The year before, there was more money for newly qualified nurses. All the investment that we are making is contributing to the expansion in NHS nursing numbers.
We all know the hon. Lady's view of the NHS. She says that she occasionally visits NHS hospitals to see what they are like for those who do not have the privilege of private health insurance. There are two views of the NHS: there are those who use it and those who regard it as a spectator sport.

Cancer

Dr. Phyllis Starkey: What progress is being made in improving services which will cut the incidence of cancer and improve cancer survival rates. [151950]

The Secretary of State for Health (Mr. Alan Milburn): National health service cancer services are receiving more investment and greater priority than ever before. Waiting times are falling, the number of cancer specialists is rising and I can tell the House today that the NHS has the fastest-improving cancer services in Europe.

Dr. Starkey: I thank my right hon. Friend for the investment that he has so far made in cancer services in

Milton Keynes. My constituents welcome the priority that has been given to improving cancer services, but if he had a further half a million pounds to invest in Milton Keynes, would he rather spend it on further improving cancer services or subsidising private health insurance?

Mr. Milburn: For a moment or two, I thought that that question would cost me money, so I approach the answer with trepidation. It is right that we invest in our cancer services. Cancer kills well over 100,000 people a year and we know that many of the deaths could have been prevented had earlier action been taken. Although the focus will inevitably and rightly be on improvements in treatment services to get waiting times down, to ensure that more operations are carried out and to provide more scanners and more equipment, the biggest gains in improving cancer care will come from improved prevention.
That is why the action that my hon. Friend the Minister for Public Health and others are taking to improve smoking cessation services, reduce cigarette consumption and ban tobacco advertising is so critical to the future of cancer care in our country. There is a choice: either spend an extra half a billion pounds a year on modernising cancer services, as we are doing, or spend half a billion pounds a year on subsidising those with private health insurance, as the Conservative party proposes.

Sir Peter Emery: Will the Secretary of State consider for a moment prostate cancer? The excellent service that I have received from the national health service at Charing Cross hospital only goes to prove what can be done if such services are carried through properly. How much extension work is being done to provide radiotherapy at more hospitals to deal with the problem of prostate cancer?

Mr. Milburn: I am grateful to the right hon. Gentleman; his comments about improvements in prostate cancer services will provide reassurance to many men. Inevitably, when people read newspaper reports about the state of cancer services, they do not always get the most accurate picture. As he knows fine well, by and large NHS cancer care is of a very high standard. We need to expand the range of services available and, most importantly of all, we need to ensure that those services are timely and of the highest possible standard.
That is why more investment is being made, particularly with the new generation of scanners—magnetic resonance imaging scanners, linear accelerators and computerised tomography scanners. Some investment comes through lottery money and some through mainstream NHS money. I can tell the right hon. Gentleman that additional investment is going into research into prostate cancer because treatments are not as good as they should be. However, I hope that, in time, we shall discover new ways to treat a deadly disease that kills far too many men in our country.

Mr. Harry Barnes: When a patient with suspected cancer visits a GP, often the GP's first question is, "Do you smoke?" That is an important question, but patients are seldom asked where they work or used to work, and in what conditions. The ex-vinatex workers group in my constituency feels that GPs and consultants should ask those questions, so that the position


can be checked and action can be taken to ensure that workplaces are safe environments. Does my right hon. Friend agree?

Mr. Milburn: My hon. Friend makes an important point, although there is a direct correlation between smoking and cancer—and, indeed, between smoking and heart disease. If we succeed in doing what we want to do—improving heart-disease and cancer services, especially on the prevention side, and cutting tobacco consumption—we shall save an awful lot of lives in our country. Finding out where people have worked provides an important clue to the cause of problems, and we are certainly prepared to think about that.

Mr. Philip Hammond: I am sure the Secretary of State agrees that a key part of the Government's strategy is the pledge in the NHS cancer plan that there will be nearly 1,000 extra non-surgical cancer consultants by 2006. Does he deny that that figure is acknowledged in his own Department to be unachievable, that Ministers at the highest level—including the Prime Minister—were advised at the time that it was unachievable, and that it was included in the cancer plan only on the Prime Minister's specific insistence?

Mr. Milburn: I would be amazed if that were the case, but if the hon. Gentleman hands me his briefing I shall gladly look into it for him.
The figures that we have announced in both the NHS plan and the cancer plan are based on modelling done in the Department. They show that over the next five years we will increase the number of cancer specialists by 25 per cent. We are having to do that precisely because of the failure to invest in cancer services in the past—a shameful failure, in my view.
When the Government came to power, we found that not a single penny piece had been earmarked for improvements in cancer services. That cash is now being earmarked: there will be hundreds of millions of pounds of extra investment in cancer services next year, rising to £570 million in just two or three years' time.

GPs

Mr. Andrew Stunell: What steps he plans to take to improve the retention of experienced general practitioners within the NHS. [151951]

The Minister of State, Department of Health (Mr. John Denham): GPs do a vital job exceptionally well, so the retention of experienced and skilled GPs is crucial to the successful delivery of the NHS plan and a modernised NHS.
In his Budget statement, my right hon. Friend the Chancellor of the Exchequer announced a new fund to tackle shortages of key staff in the health service. Some of it will be devoted to the creation of incentives for experienced GPs to remain in practice, and to encouraging GPs currently on retainers to increase their NHS commitment. My right hon. Friend the Secretary of State will give further details later.

Mr. Stunell: I thank the Minister for his answer. Three quarters of general practitioners consulted in a recent

survey in my constituency said that they were less satisfied with their conditions in the NHS than they had been two years earlier, and 60 per cent. said that they were considering leaving. Does the Minister accept that there has been a catastrophic drop in morale among GPs? Does he agree that it is vital for us to plug the gap and to restore confidence in their work and in the NHS?

Mr. Denham: What is important is that we underline our commitment to putting general practice at the heart of our NHS reforms. We are already doing that with the creation of primary care groups and, now, primary care trusts. Measures that we are taking today to encourage further GP recruitment will help to bring into general practice the extra numbers that we have promised. We are also taking measures to reduce GPs work loads by cutting bureaucracy, and we wish to develop extended roles for other members of the primary care team staff so that GPs can concentrate on the patients who need their support most.
In all those ways, we are committed to improving the working and the professional life of GPs, because they play a particularly important role in the delivery of a modern NHS.

Mr. Bill O'Brien: I welcome my right hon. Friend's statement on the provision of additional support for GPs, which is obviously an urgent matter. However, will he also take into consideration current patient waiting times to see GPs? I have problems in my constituency with that matter, and it would be helpful if he would examine it with some urgency with a view to reducing waiting times for patients.

Mr. Denham: My hon. Friend makes a very important point. We have said that by 2004 we want patients to be able to see a GP within 48 hours. We are already showing, in the work done by the primary care development team, how practices can reorganise themselves to meet that access target without—this is very important—increasing the work load and burden on GPs. Additionally, we have allocated funds from the record investment that we are making this year in the NHS to enable primary care practices to extend and improve patient access.

Mr. David Tredinnick: Does the right hon. Gentleman agree that one of the best ways of retaining GPs and cutting surgery waiting times is to make greater use of complementary and alternative therapies? Is he also aware that many doctors refer to a proportion of their cases as heart-sink patients whom they cannot help, whereas 70 per cent. of those patients get relief if they are referred to acupuncturists, herbal medicine practitioners or homeopaths? Does he not think that now that 30 per cent. of the United Kingdom population have tried herbal medicines, it is time that the Government responded positively to the Lords report on complementary medicine and made such medicine more widely available on the national health service at the point of delivery?

Mr. Denham: I congratulate the hon. Gentleman—whom I always think of as the hon. Member for Holland and Barrett—on his consistent contribution to our debates. Clearly, there is a level of interest among GPs in making use of complementary medicines. The British Medical Association has produced guidance which has been


circulated to all primary care groups and primary care trusts on the prescribing of and referral to complementary medicine. Additionally, as the hon. Gentleman has said, the House of Lords has produced an important report on the issue, which the Government are considering.

Mr. Peter L. Pike: Does my right hon. Friend accept that Burnley and east Lancashire are areas of deprivation where there are health problems because of some of their traditional industries? Does he also accept that they are also the very areas where it is difficult to retain GPs and to attract new GPs? Will he ensure that money is targeted towards attracting and retaining the GPs whom we need to provide services in such areas?

Mr. Denham: One of the measures that my right hon. Friend has announced today is a £5,000 payment to newly qualified GPs finishing their period as a GP registrar and entering general practice. The payment will be £10,000 in deprived and under-doctored areas. We have taken that action not only to increase the proportion of doctors entering general practice, but particularly to encourage them to work in areas that are currently short of doctors or facing high deprivation levels. I hope that my hon. Friend will feel that we have tried to design the scheme that we have announced today around the types of needs that he has described.

Rev. Martin Smyth: We welcome the attempts being made to reimburse GPs. However, as the father of a GP—I declare an interest—may I ask what research has been done into why 40 per cent. of GP trainees do not enter general practice? Is the Minister convinced that it is simply a matter of money, or does he think that other action is needed to reform the system, so that we can not only attract GPs but retain them?

Mr. Denham: That is a very good question. There is no doubt that the financial incentive that we announced today, which has been welcomed by the BMA, will help. However, there are other barriers. One is that it can seem to be a fairly daunting step to move from the fairly structured environment of training to taking on the full responsibilities of a GP principal. Therefore, one of the additional measures accompanying the financial package which we have announced today is 20 days of additional training in the first year of practice as a GP principal—something that has been argued for by the BMA. By doing that, we hope to provide greater support for doctors who want to go into general practice. We want to ensure that they can maintain their professional skills and overcome the inevitable challenges of their first year in practice.

Dr. Liam Fox: According to this week's edition of the Doctor newspaper, 70 per cent. of GPs surveyed supported some form of action to highlight their "anger and disillusionment" with the Government. The Government have been in office for four years, so how does the Minister account for that finding?

Mr. Denham: One of the things that GPs know is that for the past three years this Government have paid pay review body awards in full and without staging. In contrast, the Conservative Government regularly failed to

implement those awards in full and without staging. GPs therefore know the difference between this Government and the previous Conservative Government.
One of the problems is that there are currently too few GPs. I remind the hon. Gentleman that the number of GP registrars fell by 20 per cent. under the previous Government. Under this Government, there have been four consecutive years of increase in the number of GP registrars in training. That means that there will be more GPs in the future, and that we will achieve our target of at least 2,000 more GPs by 2004. As has so often been the case, we have had to undo the damage done by the previous Government. If there had not been the cut in the number of GPs in training under the previous Government, it is a reasonable assumption that we would have 700 more GPs in the NHS today than we do.

Dr. Fox: The real causes of GPs anger and disillusionment have been four years of non-stop reorganisation and change, increased centralisation by the Secretary of State, the scapegoating of the profession by Ministers in this House, increased paperwork and form-filling, and less time for patients. All of that has led to the lowest morale that anyone can remember.
The Minister has just told the House that he accepts that there are too few GPs. Will he therefore say why his team of Ministers told the pay review body this year that the Department's findings showed no support for suggestions of a retention problem? They said that
the findings were very encouraging, pointing to the continuing improvement in recruitment indicators".
Which version of those two truths would the Minister like us to believe?

Mr. Denham: The number of people leaving general practice is at its lowest level for five years. That is a fact. We are addressing the real problems that we inherited from the previous Government, who failed to train enough GPs and nurses or to invest enough in primary care. We have shown our commitment to putting primary care at the front line of the new NHS by saying that we will devolve £25 billion of NHS resources to primary care, to be controlled by primary care groups and primary care trusts. Those resources will give GPs and other practice staff a say in and an influence over the shape of the NHS that they have not had previously.
Practice facilities will improve as we continue to invest in GPs and link them to NHS Direct. In addition, the 3,000 premises that will be modernised under NHS LIFT will mean that GPs will have better premises from which to work. The neglect of the NHS that was the hallmark of the previous Government is being reversed—in primary care as well as in hospitals.

Hospital Waiting Times (South-West)

Mr. David Heath: If he will make a statement on hospital waiting times in the south-west. [151952]

The Minister for Public Health (Yvette Cooper): At the end of January 2001, the number of south-west residents waiting for in-patient treatment in the region was 98,579—a drop of 10,422, or 9.6 per cent., on the position that we inherited in June 1997. As waiting lists have come down, the number of long waits is also falling.

Mr. Heath: I asked about waiting times. Does the Minister accept that the money given to acute hospital trusts under the Budget will often be soaked up by the financial deficits that the trusts have accumulated over recent years? Constituents of mine who need routine operations, such as hip operations, do not want to pay for private treatment, which is what the Conservative party advocates. However, neither do they want to wait for 18 months for the operation, which is the current waiting time at the Royal United hospital in Bath. When are things going to get better?

Yvette Cooper: I have to tell the hon. Gentleman that the NHS in the south-west is treating more patients than ever, and is carrying out more hip operations than ever. I think that the trust in his area, along with the trust in my area and those right across the country, will strongly welcome the extra money that they have been allocated in the Budget, on top of the boost to their resources that they have had from this Government, who are doubling the real increase that they have had over the past 20 years.
The hon. Gentleman is right that we need to bring down waiting lists. That is why we have set a target in the NHS plan to bring down waiting times from 18 months to six months by 2005. That requires extra investment, which this Government are putting in and which, frankly, the Opposition could not match.

Ms Julia Drown: Will my hon. Friend congratulate staff at Swindon's Princess Margaret hospital who have worked extremely hard to reduce waiting times in ophthalmology and audiology? The dedication of staff teams and the Government's investment in resources have led to massive reductions in audiology and cataract waiting times. Will my hon. Friend assure my constituents that this investment will continue and that we will see further reductions in waiting times, increases in the quality of services and less pressure on our very hard-working NHS staff?

Yvette Cooper: I assure my hon. Friend that the increase in investment in the NHS of more than 6 per cent. in real terms each year will continue for the next few years. I congratulate staff across the NHS who are working to bring down waiting times, often through new innovative programmes, including the cancer collaboratives. It is not simply about extra resources—it is about modernisation as well.

Mr. John Bercow: Does the Minister understand the deep-seated resentment of the droves of people in the south-west who languish indefinitely on the waiting list to get on the waiting list? Does she recognise that it is unacceptable that in many cases cheap, simple and non-urgent operations are leapfrogging expensive, complicated but urgent operations simply to satisfy the Government's ludicrous waiting list initiative? In answering that question, will she bear it in mind that her response is of the keenest possible interest throughout

the south-west, not least to the excellent prospective Conservative parliamentary candidate for the Somerton and Frome constituency, Mr. Jonathan Marland, who will shortly be replacing the hon. Member for Somerton and Frome (Mr. Heath) as that constituency's representative in this House?

Yvette Cooper: I am reluctant to intrude on this private argument. The extra investment in the NHS is about bringing down waiting times across the board. Perhaps the hon. Gentleman should consider the fact that his party's policy to cut £340 million from resources for tackling waiting lists would push up waiting times. Patients would have to wait longer, apart, of course, from people needing hip, hernia and cataract operations—they would not have to wait at all, because Conservative party policy would deny them any treatment on the NHS.

Community Hospital (Gravesend)

Mr. Chris Pond: If he will make a statement on the proposed timetable for establishing the new community hospital in Gravesend. [151953]

The Parliamentary Under-Secretary of State for Health (Ms Gisela Stuart): The public consultation on the proposal to develop integrated health and social care facilities on the Gravesend and North Kent hospital site is due to begin this month.

Mr. Pond: I thank my hon. Friend not only for that reply but for the considerable support that she has given to our efforts to rebuild the health service in Dartford and Gravesham and for the extra resources to open the new ward at the Gravesend and North Kent hospital and to keep it open. In addition, there are plans for a community hospital of more than 100 beds with the full range of out-patient services.
Does my hon. Friend understand that after years of neglect of the health service in our area under the previous Government, my constituents are impatient to have the new community hospital in Gravesend? Will she make it clear to everybody involved in the project—and I pay tribute to the primary care trust for its work—that it is essential to stick to the time scale proposed for the community hospital? Will she also make it clear to all concerned that this is a hospital? If it has beds like a hospital, if it has nurses like a hospital and if it has out-patient services like a hospital, it is a hospital, and that is what we should call it.

Ms Stuart: Under the private finance initiative, my hon. Friend's constituents have benefited from a £94 million new hospital. In due course—I share his impatience, and certainly want it to happen on time—they will benefit not only from a new community hospital with about 100 beds and 200 day care places per week, but from extended new community facilities. The hospital is in addition to the new facilities—a new, innovative project with social services. People will benefit from extra investment and see in reality what modernisation means—bringing health and social care together under one roof.

Health Care (Older People)

Mr. Tom Clarke: What measures he has taken to promote a strategy of health care for older people that is based on keeping them in the community. [151955]

The Minister of State, Department of Health (Mr. John Hutton): The Government are committed to promoting older people's independence and ensuring that they are helped to remain in their own homes for as long as possible. The NHS plan announced a range of measures to promote independence and improved quality of care for older people, including additional intermediate care beds and places, extra rapid response teams, additional home care and other support services, improved community equipment services, and carers respite services. In 1999–2000 an estimated 15,000 to 20,000 more older people were being helped to live at home than in 1998–99.

Mr. Clarke: I thank my hon. Friend for that reply. Does he agree that for many disabled elderly people the provision of aids and equipment can make the difference between enjoying living in their own homes and being forced into residential care? Does he agree that tackling that approach and ensuring that there is proper funding lie at the heart of modern care in the community?

Mr. Hutton: I certainly agree with my right hon. Friend, and I pay tribute to his work in the House and outside to support people with disabilities. He is right about the importance of community equipment services. That is why in the NHS plan we announced a further £100 million of NHS expenditure in the next three years to support new types of equipment and ensure that they reach older people more quickly. That is the key to improving the independence of older people. By the same token, it is a matter of real regret that the Conservative party has not yet been able to match our commitment to making those investments in community equipment services. The Conservatives have refused to match our spending on social services, which lies at the heart of the new investments that we are making. Until they do so, their promises to older people will be treated with utter and total contempt.

Mrs. Lorna Fitzsimons: Is my hon. Friend aware that the report that, thankfully, he commissioned in Rochdale on the care of older people looks as if it will show that there has not been enough investment in intermediate and intensive home care for the elderly? Will he do everything he can to ensure that the investment is there to help our council to prioritise that much-needed home care, rather than there being an over-average reliance on putting people into residential homes?

Mr. Hutton: I agree with my hon. Friend. Most Members, and most of our constituents, would certainly prefer to be looked after at home whenever possible—it is certainly where I would want to be, and I am sure that every right hon. and hon. Member would want that option too. For far too many older people that option has not been available because the necessary health and social care services have not been available. We are putting that right. Nearly £900 million in new investment is going into health and local authorities in the next three years. I repeat

that the Conservative party will not match that expenditure, and that would compromise the health and well-being of millions of older people—I am sure that my hon. Friend will want to take advantage of that fact in the next few weeks.

Mr. Julian Brazier: Whatever the Minister's plans for home care for elderly people, may I urge him not to allow the Nunnery Fields geriatric and stroke hospital to be closed until alternative provision is genuinely available? It is now only a few weeks since 97-year-old Connie Jones died after a two-day wait in a corridor for a proper medical bed. Yet again, over the weekend all three of our accident and emergency units were completely overloaded, leaving many elderly people waiting; one unit was closed to new entrants. Will the Minister ensure that we have enough bed provision for elderly people before that hospital closes?

Mr. Hutton: I hope that the hon. Gentleman will understand that I am not familiar with the facility that he describes—but I will certainly write to him about the issue that he has raised. I am sure that he will be the first to acknowledge that the Government are making significant additional resources available both for the NHS in Kent, and for Kent county council to improve the range of services for older people. I know that it is the common practice of the hon. Gentleman and his hon. Friends to bemoan rates of expenditure, but until he can persuade his right hon. and hon. Friends on the Front Bench to match the expenditure to which we are committed, his words will sound rather hollow.

Mr. Nick Harvey: I welcome the objective of treating more people in their own homes. However, is the Minister not alarmed that social services budgets throughout the country are expected to finish the financial year more than £200 million overspent? Although he has announced rises in the standard spending assessment for next year, social services directors expect next year to be even tougher. What hope is there that the services the Government talk about can be provided for people in their own homes, if social services departments struggle to meet even their existing commitments out of their existing resources?

Mr. Hutton: I am aware of the concerns to which the hon. Gentleman rightly draws attention—as are most right hon. and hon. Members. However, during the past three years we have provided 12 per cent. real-terms growth in social services spending. More real-terms growth is coming. It is worth comparing like with like: during the previous Parliament, real-terms growth in social services spending was 0.1 per cent. During this Parliament and over the comprehensive spending review period, it will be 3.4 per cent. in real terms.
The hon. Gentleman and his hon. Friends are always saying that we must have more—I am sure that is what he is saying today—but when we look at the small print of the Liberal Democrats' policies on public finances, we realise that that is a complete load of old cobblers. The money does not add up; there is the same one penny on income tax—they recycle it time after time after time.


The hon. Gentleman's policies on public finance are kindergarten economics; they stand up to no scrutiny whatever.

Mr. David Taylor: Most Labour Members support the sentiments in the main question. However, when I addressed the Caretalk conference for care home proprietors and managers at Leicestershire county cricket club last Friday, I heard that far too many elderly people, when they are eventually admitted to care, are poorly nourished, lonely, depressed, frail and more ill than they might otherwise have been, because of the failure of home care services. Is the Minister confident that we can improve those services so that it really is worth while to encourage elderly people to stay at home?

Mr. Hutton: If more older people are to be looked after properly at home, there is no doubt at all that we shall have to provide not only more but better quality services to support them in that environment. Last year, through much hard work and sensible use of resources, local authorities were able to provide a significant number of additional care packages to support more older people so that they could remain independent at home for longer. We intend to build on and develop that, but it is important—and fundamental to our plans—that if we are to encourage more older people to stay at home, which is the right thing to do, we provide better and more easily accessible services that are better supported and resourced. That is precisely what we are trying to do.

Mr. Michael Fabricant: The Minister knows, however, that from time to time older people have to go into respite care. Is he aware that in my constituency, South Staffordshire health authority now plans to close Hammerwich hospital and to halve the number of beds in the Victoria hospital in Lichfield? Is he further aware that Staffordshire MPs held a meeting with the health authority, and were told that the Government had uplifted prescribing costs by 9 per cent? That is good, except for the fact that the full cost of prescriptions is likely to be 12 per cent.—bad—and that, as a result of the National Institute for Clinical Excellence, the Government have made an extra commitment of £500,000 for South Staffordshire health authority—good—except that the result of the cost will be an extra £2 million—bad. We currently suffer a £4.7 million rolling deficit. Come on, let us have adequate funding.

Mr. Hutton: I am probably not the only hon. Member in the House who did not follow the hon. Gentleman's question. Perhaps there is a chance that when I read it in Hansard it might make better sense. The hon. Gentleman ended his question—[Interruption.]

Mr. Speaker: Order. The hon. Member for Lichfield (Mr. Fabricant) has asked a question. The Minister must be allowed to reply.

Mr. Hutton: I am grateful to you, Mr. Speaker. The only point that I understood in the question put by the hon. Gentleman was the request that the Government should spend more on the national health service. No one in the House could regard that as a serious question or a serious proposition. The official Opposition have not even

committed themselves to matching the expenditure that we have provided for. [HON. MEMBERS: "Yes, we have."] No they have not. Of course Opposition Members want to claim that, but it is complete and utter nonsense.
One of the points that the hon. Gentleman and his hon. Friends refuse to deal with is their plan to spend £500 million more on subsidising private health insurance. Where is that going to come from? The hon. Gentleman should have a conversation about that with the hon. Members on the Opposition Front Bench. His party will not match our expenditure on health and social services, so his question is complete nonsense.

Coronary Heart Disease

Ms Sally Keeble: What progress is being made in improving services which will cut the incidence of coronary heart disease. [151956]

The Minister for Public Health (Yvette Cooper): Two of the biggest causes of heart disease are smoking and lack of access to fruit and vegetables. That is why the action to cut the incidence of heart disease includes comprehensive support for smokers who want to give up, and rolling out free fruit in infants schools.

Ms Keeble: I thank my hon. Friend for that response. Is she aware that this Friday, a new chest pain clinic is opening at Northampton general hospital, and does she agree that such measures will not only help to cure heart disease but will help people to monitor their own condition and get it under control?

Yvette Cooper: I agree with my hon. Friend, and I certainly welcome the arrival of the new rapid-access chest pain clinic in Northampton. In the national service framework we have set out plans for rapid-access chest pain clinics throughout the country. Those are being opened as we speak, and are starting to provide services throughout the country, because it is important that when people are suspected of suffering from heart disease they can be seen very swiftly and properly diagnosed.

Dr. Jenny Tonge: Is the Minister not concerned about the lack of fitness among our young people, and does she not consider that that is due to a lack of sporting facilities and sports education in our schools? We may accept that that is largely due to the selling of school playing fields and the requirements of the national curriculum, but what talks is the Minister having with her counterparts in the Department for Education and Employment to ensure that sport is made compulsory in our schools?

Yvette Cooper: We have had considerable discussions with the DFEE and the Department for Culture, Media and Sport about promoting sport in schools. The hon. Lady will be aware that considerable work has been done to promote sport in schools, and to create school sports co-ordinators to increase access to exercise among young people. However, this issue is not just about sports; it is about exercise and access to exercise across the board.


The creation of safe routes to school for many of our young people is another important way of increasing their access to exercise.

Mr. Dennis Turner: I am not sure whether Ministers, particularly my right hon. Friend himself, are aware of the deep affection in which the Secretary of State is held by my constituents, following his recent announcement of a state-of-the-art £44 million coronary care unit for Wolverhampton and the black country. My right hon. Friend is aware, as all our Ministers are, that we have the highest incidence of heart disease in the whole west midlands region, but the lowest access to such important life-saving facilities. Thank you very much, Ministers.

Yvette Cooper: I join my hon. Friend in welcoming the new state-of-the-art cardiac surgery centre in Wolverhampton, and pay tribute to his very persistent lobbying on behalf of his constituents for the cardiac centre these past many months. He is right that it is important to increase access to heart operations and to increase the number of heart operations taking place in this country. He is also right that it is important to target those services exactly where we need them, in order to tackle the health inequalities as well, because the blunt fact is that a person on a low income is three times more likely to suffer from heart disease than a person on a high income. That health inequality is morally wrong.

Consultants Contracts

Mr. David Amess: What representations he has received on the negotiations for new consultants contracts. [151957]

Dr. Julian Lewis: If he will make a statement on the recruitment and retention of consultants. [151961]

The Secretary of State for Health (Mr. Alan Milburn): The Government's proposals for a new consultants contract were published last month. We are now in negotiation with the British Medical Association on our proposals and its own. In the meantime, the number of consultants in the NHS has increased by almost 3,000 since 1997. We are committed to further significant increases as part of the NHS plan. By 2004, there will be 7,500 more consultants working in the NHS.

Mr. Amess: I take all that with a pinch of salt. Surely the Secretary of State realises that, even by the standards of this deeply sinister, incompetent—[HON. MEMBERS: "Rotten Government"]—rotten Government, his policy on consultants contracts is wrong. Will he now undertake to look carefully at the evidence given to the Select Committee on Health, which showed that morale in our health service will plummet as a result of that policy? Will he undertake to stop his wicked attack on our hard-working consultants and realise that although we need more hospital consultants, we certainly do not need a Labour Secretary of State for Health?

Mr. Milburn: I know that the hon. Gentleman is parliamentary adviser to the Caravan Club—which probably explains why he is undertaking his political tour

of Essex constituencies at the moment—but not everyone has the luxury of having two jobs at once. It is right that we correct this historic anomaly, and our proposals are designed to do something very simple indeed. The consultants contract has remained unreformed since 1948; it is about time it was changed. I want to put the NHS in a better position to compete for consultants valuable time, expertise and skills, for the benefit of NHS patients.

Dr. Lewis: Does the Secretary of State's policy not show that he thinks he knows a lot better than the founding fathers of the NHS, who recognised the problems that would be caused if consultants were forced into the NHS and not allowed to engage in private practice? What makes him think that he has a better solution to the problem, which is fundamentally the same now as it was when Aneurin Bevan and other Labour Ministers, who knew what they were doing, decided that the course that he proposes to adopt was totally wrong, counter-productive and would result in consultants being lost from the NHS?

Mr. Milburn: The hon. Gentleman is the oddest looking Bevanite that I have ever seen in my life; poor old Nye would be turning in his grave at the prospect of the hon. Gentleman supporting him. The contract has remained unreformed since 1948. It has remained as it was then for the past 53 years, and it has to change. The whole assumption behind the consultant contract has been that the best way for NHS consultants to get on is by opting out of NHS work. We must turn that on its head. There is a fair deal on offer for NHS consultants. We will pay them more for doing more NHS work, in exchange for which we expect them to do less private practice. We have proposed the deal, and we shall negotiate it.

Mr. David Hinchliffe: The Health Committee's inquiry into consultants contracts was mentioned a moment or two ago. Does my right hon. Friend remember that during that inquiry, we received evidence that, in certain parts of the country, NHS waiting lists were being artificially lengthened to stimulate a demand for private consultations and private treatment? In the negotiations with the consultants, has that matter been considered?

Mr. Milburn: I understand that there are concerns about precisely those issues. Many patients find being confronted with such potential conflicts of interest extremely uncomfortable, but that is not the primary purpose of what we seek to do. Given that we have a limited number of NHS consultants—we shall have more in future—our primary purpose is to ensure that we get the maximum amount of NHS time from them. That seems reasonable; it is not a something-for-nothing deal.
We are seeking to pay NHS consultants more for doing more NHS work. They will receive an average of £10,000 a year extra when they start out as NHS consultants. They will have extra access to discretionary points and extra access to £20,000 worth of extra rewards in exchange for doing less private practice. That is the deal that we have proposed. It makes a fundamental break from what has


gone before, but I believe that in the end, it will be welcomed not only by NHS consultants, but, most importantly, by NHS patients.

Mr. Dennis Skinner: I wish my right hon. Friend well in his endeavours. Do we not all know that, contrary to what Tory Members have said, Nye Bevan wanted to do exactly what my right hon. Friend is attempting to do today? The money was not there then, but we have now got an economy that enables us to achieve what we could not do in the 1940s. My right hon. Friend should not worry when the Tories talk about doctors and consultants with more than one job, because nearly every Tory MP moonlights as well.

Mr. Milburn: My hon. Friend, as always, makes a very good point. I will not take much notice of what the Conservatives say, but of course we shall listen to what the consultants say. There will be a negotiation, and we have set out our position very clearly indeed. We shall negotiate on it, and I fully expect us to make progress.

Mr. Peter Lilley: Although I accept that it is normally desirable to retain experienced and dedicated consultants in the NHS, will the Secretary of State set up an inquiry into why Mr. Lennox Kane, a consultant gynaecologist at Hemel Hempstead who had been diagnosed with Parkinson's disease, was allowed to continue operating? Will the inquiry investigate the complaints of 27 of his women patients about the treatment that they received? Will the right hon. Gentleman use his good offices to ensure that the chief executive and chairman of the health authority and the trust agree to meet the members of the action group that was set up to represent those patients before such an inquiry, not after, which is all that they have agreed to at present?

Mr. Milburn: The circumstances that the right hon. Gentleman describes are extremely disturbing. As I understand it, the trust is already reviewing the way in which the complaints were or were not acted upon. I promise him that I shall look into precisely the matters that he has raised with me.

Mr. Desmond Swayne: On 11 June last year, the Secretary of State told BBC television:
In most walks of life employees have got a choice haven't they about whether they work part-time or whether they work full-time … We are not going to deny that to consultants. Surely, why should we? It would be a pretty odd state of affairs if we said to highly trained consultants, some of the most expert people, professionals that we have in the Health Service, you are going to be denied a set of rights that everybody in the NHS has.
Can the Secretary of State explain what change has brought about the pretty extraordinary state of affairs that we now find, or was that statement, like the concordats with the private sector, just part of the mood music? Is not the authentic Secretary of State the authoritarian that we see before us at the Dispatch Box now?

Mr. Milburn: Welcome to Health questions. The hon. Gentleman should read the Government's proposals.

Mr. Graham Brady: Answer the question.

Mr. Milburn: If the hon. Gentleman will stop hollering, I will try to answer the question. If he calms down and keeps taking the pills, he will be fine.
If the hon. Member for New Forest, West (Mr. Swayne) reads the Government's proposals, he will see that there is perfect consistency between what was said then and what is being said now. We have made it perfectly clear that, in exchange for extra rewards, we will expect newly qualified consultants not to work in private practice for up to seven years. Following that seven-year ban, it will be perfectly permissible for consultants to undertake a limited amount of private practice. That seems to me to be the right thing to do. It is right for consultants, because it gets them extra rewards, and it gets NHS patients the extra skills, the extra commitment and the extra expertise that they need.

Pace of Change Policy

Dr. Brian Iddon: If he will make a statement on the pace of change policy. [151958]

The Minister of State, Department of Health (Mr. John Denham): Each year, the Government decide how extra resources should be deployed between across-the-board increases to maintain continuity and stability in the service and to make progress nationally in priority areas, and differential distribution to bring under-target health authorities nearer to equity.

Dr. Iddon: Whichever indicators are used, they show that people in my constituency are desperately in need of extra resources to improve their health. Figures in my possession show not only that in the financial year 1993–94, the Bolton part of Wigan and Bolton health authority was 6 per cent. off its target, but that the situation has not improved in the current year, and we are still 6.5 per cent.—£13 million—under target.
I congratulate the Government on allocating, this year and next year, the most extra resources to the health authority that it has had since the NHS was created—but will my right hon. Friend ensure that the money is targeted at people such as my constituents, who are in the greatest need?

Mr. Denham: Four years ago, Wigan and Bolton health authority was almost 5 per cent. below target; now it is less than 3 per cent. below target. The important point is that it has received a cash increase of 9.1 per cent. for next year. My hon. Friend will know that the health authority's ability to address poverty and inequality is far greater with such an increase in resources than it would be if the Conservative party was in power, implementing its pledge to cut £16 billion from public spending—which would of course include cuts in health service spending.

Points of Order

Mr. Francis Maude: On a point of order, Mr. Speaker. The ministerial code of conduct published by the Prime Minister states:
It is of paramount importance that Ministers give accurate and truthful information to Parliament, correcting any inadvertent error at the earliest opportunity. Ministers who knowingly mislead Parliament will be expected to offer their resignation to the Prime Minister".
In recent days, an account has been published of events surrounding the publication of the Foreign Affairs Committee report on Sierra Leone and, in particular, reporting certain actions of the Foreign Secretary and his press secretary, Mr. John Williams.
It has been alleged that those actions, whose factual accuracy has not, I understand, been challenged, are simply inconsistent with the account given to the House and its Committees on no fewer than three separate occasions. In particular, the apparent telephoning of a reporter by Mr. Williams at 6.45 am on the day of publication seems inconsistent with the Foreign Secretary's assertion:
There was no briefing—no leak to the press in advance of publication by the Foreign Office or any Minister in the Foreign Office."—[Official Report, 24 February 1999; Vol. 326, c. 416.]
Also inconsistent is the allegation that the Foreign Secretary himself also phoned the same reporter some hours before publication.
Next week, the Foreign Secretary has to represent Britain at the Stockholm summit. His ability to do so has been seriously affected by the cloud now hanging over him. It is urgently necessary in the national interest that the matter be resolved at the earliest possible opportunity. Has the Foreign Secretary asked to make a statement to the House which would clear up this disturbing matter for good?

Mr. Speaker: I can tell the right hon. Gentleman that the Foreign Secretary has not asked me whether he can make a statement.

Helen Jones: On a point of order, Mr. Speaker. I seek your guidance on a matter raised in paragraph 50 of the fourth report of the Public Administration Committee, which states that
the Official Opposition and its auditors were unable to give a categorical assurance that its Short Money funding was used exclusively for parliamentary business.
It states also that the Opposition afterwards approached the Fees Office to arrive at a new description of parliamentary business, without consideration by the House. Is it in order for any party to act in that way, without recourse to the House? Will you investigate the matter and ensure that any rule changes are introduced by the House and no one else?

Mr. Speaker: I feel that it would have been helpful if I had received notice of that point of order. I will look into the matter and get back to the hon. Lady.

Mr. Christopher Chope: On a point of order, Mr. Speaker. I want to raise a matter relating to motion 13 on the Order Paper. On 7 March, European

Standing Committee C spent some two hours debating issues of interest to millions of people about the pricing and servicing of new cars in the context of the European Commission review of the exemption enjoyed by motor vehicle manufacturers from the general ban on anti-competitive agreements. I moved an amendment tabled by the Chairman of the Trade and Industry Committee, the hon. Member for Normanton (Mr. O'Brien) and others of that Committee's members. At column 26 of Hansard, the Minister for Competition and Consumer Affairs said:
I am happy to accept the amendment because it reflects the Government's intentions 
He also said:
It sharpens the motion and is a good indicator of our thinking".—[Official Report, European Standing Committee C, 7 March 2001; c. 26.]
The amendment was agreed, and the amended motion was carried unanimously and reported to the House by the Chairman of the Standing Committee. Today, without warning, the Government have tabled motion 13, which is the unamended version. What is the purpose of a Standing Committee if amendments that are agreed with Government support are, a few days later, deemed not to have been accepted? Will you, Mr. Speaker, accept a manuscript amendment phrased in the same terms as the amendment that was accepted in Committee so that the motion can be amended if the Government press it?
I remind the House and you, Mr. Speaker, that in 1991, the Procedure Committee said that tabling a motion which did not reflect the Standing Committee's decision made a mockery of the scrutiny process. In 1997 it further said that the outcome of Committee proceedings should not be swept under the carpet if the system is to retain credibility. The Government are riding roughshod over the procedures of the House and the scrutiny process.

Mr. Speaker: I am grateful to the hon. Gentleman for giving me notice of his point of order. If he tables such an amendment, I shall give it careful consideration. In addition, I am sure that Ministers heard what he said.

Mr. Simon Hughes: On a point of order, Mr. Speaker. My concern is straightforward. You will be aware that we were due to finish the Criminal Justice and Police Bill in Committee last Thursday. You will also know that we debated the Government motion on that until the early hours of this morning and that, at about 2 am, we agreed to go ahead without finishing the Committee stage. The Bill is due back on the Floor of the House tomorrow. In the light of the fact that some hon. Members do not have the normal opportunity for tabling new clauses or amendments, would you be willing to select such proposals for debate if they were tabled today for consideration tomorrow? In such circumstances there is usually at least an intervening weekend, giving hon. Members five days' notice, but last night's unprecedented decision means that notice has been shortened to less than a day and a half.

Mr. Speaker: The hon. Gentleman asks whether I would select new clauses and amendments for debate.


I can only do that when I see what is on the amendment paper. When I see what is tabled, I shall give the matter due consideration.

Mr. Patrick Nicholls: On a point of order, Mr. Speaker. You will be aware of the devastation that is being caused in the west country by the foot and mouth crisis. It is affecting not only agriculture but other industries, especially tourism, which is suffering from massive cancellations of places and hotels. With that in mind, have you received a request from the Prime Minister or the Secretary of State for the Environment, Transport and the Regions to make a statement to the House on today's announcement by the Prime Minister that a taskforce will be set up under the chairmanship of the Minister for the Environment, to consider—as we understand it from press reports—compensation arrangements that flow from the foot and mouth crisis? I should like to think that you have received such a request, which you would, no doubt, treat favourably. Once again, an interesting press statement has been released, but its terms of reference need to be examined in the House. That issue is of vital concern to anyone who comes from an area where foot and mouth is rampant.

Mr. Speaker: I hear what the hon. Gentleman says. I have not received such a request, but I am sure that Ministers will take on board his deep concerns.

Mr. John Redwood: On a point of order, Mr. Speaker. Yesterday, a Committee of this House reported on the conduct of the Minister for Europe, the hon. Member for Leicester, East (Mr. Vaz). One of the many disturbing features of the report was a statement that several important allegations could not be properly investigated by the Parliamentary Commissioner for Standards because the Minister and some of his close associates in his constituency organisation were not prepared to co-operate with the inquiry.
Is there a way that the commissioner can be asked to reopen the inquiry and that the Minister and his friends and associates can be required to comply with the wishes of the House? I thought that the Government wanted to bust sleaze, but now we have a Minister who does not. Many of us think that the hon. Gentleman should resign while the matter is investigated. Can you advise us on how to pursue that?

Mr. Speaker: That is a matter for the Committee; it is up to it to look at it.

Mr. Michael Fabricant: On a point of order, Mr. Speaker. At Health questions, the Minister of State, Department of Health, the right hon. Member for Southampton, Itchen (Mr. Denham), announced that the Secretary of State would make a statement on GP recruitment and retention payments, which are a new Government initiative. However, that was announced on the lunchtime news today, and was also in The Times, The Daily Telegraph and The Independent. Is that not an abuse of the House by a Government who make a habit of abusing the House?

Mr. Speaker: That is a matter for the Minister, not the Chair.

Mr. Derek Twigg: On a point of order, Mr. Speaker. Yesterday, the hon. Member for Eddisbury (Mr.

O'Brien) commented on concern about the transportation of cattle slaughtered because of foot and mouth; the carcases were going through Cheshire to a rendering plant in Widnes in my constituency. That has caused great concern in my constituency, and I have asked several questions and made representations to the Minister of Agriculture, Fisheries and Food. I received a phone call late this morning from a local radio station saying that some farmers in Cheshire were threatening to block roads into my constituency, to stop the carcases getting to the plant.
As I said, there is general concern about that. I am worried that, if transportation were stopped, that might cause more of a problem. Would you look favourably on any request for a statement on transportation, Mr. Speaker?

Mr. Speaker: I understand that the Minister of Agriculture, Fisheries and Food is coming to the House. If the hon. Gentleman catches my eye, he may be able to put the matter to him.

Miss Anne McIntosh: On a point of order, Mr. Speaker. Pursuant to your ruling on the point of order raised by my hon. Friend the Member for Christchurch (Mr. Chope), would it be appropriate to remove motion 13 from today's Order Paper until the full text has been agreed by European Standing Committee C—on which I too serve—so that it can be considered by the whole House?

Mr. Speaker: I have been told informally that there was a mistake and that the motion may not be moved. That may be helpful to the hon. Lady and the hon. Member for Christchurch (Mr. Chope).

Sir Patrick Cormack: On a point of order, Mr. Speaker. A moment or two ago, you indicated that the Minister of Agriculture, Fisheries and Food was coming to make a statement. Could you clarify that, please?

Mr. Speaker: Not today, but this week. I understand that the Minister has indicated that he will come this week. [HON. MEMBERS: "Tomorrow?"] It may be tomorrow; it is certainly not today.

Mr. Stephen O'Brien: Further to the point of order raised by the hon. Member for Halton (Mr. Twigg), Mr. Speaker. The transportation of infected carcases through Cheshire is causing grave concern. I raised that in a point of order yesterday and, quite rightly, the hon. Member for Halton has referred to farmers' anxieties. No one in the House would condone actions that did not conform with the law but, apart from the dangers of vented trucks carrying carcases passing through an area, neither the police nor the trading standards authorities were informed of the transportation before it took place.
I urge you to use your best offices, Mr. Speaker, to ask the Minister to attend the House as soon as possible so that those matters can receive proper attention and so that assurance can be given to farmers, who are desperately worried.

Mr. Speaker: I understand that it must be a worrying time for hon. Members who have farming communities,


but I have to say that many of the questions being asked by hon. Members on points of order are really matters for the Minister of Agriculture, Fisheries and Food. I have said that I understand that that the right hon. Gentleman is coming to the House this week.

Mr. John Bercow: On a point of order, Mr. Speaker. Further to the report in that journal of truth and wisdom, The Sunday Telegraph, to the effect that the application for a passport by Mr. Duncan Fletcher, the excellent Zimbabwe-born coach of the England cricket team, has been refused, have you received any indication from a Minister at the Home Office that he or she intends to come to the House to explain that curious conduct, particularly to assure hon. Members that the rejection is not explained by the fact that Mr. Fletcher is neither a donor to the Labour party nor a sponsor of the millennium dome?

Mr. Speaker: I have had no such indication.

Mr. Fabricant: On a point of order, Mr. Speaker. This is a separate point of order from my earlier one. First, may I apologise to you, and give an explanation for losing my normal calmness and amiable demeanour following the answer to my question at Health Question Time? May I explain that I was quoting from the South Staffordshire health authority report, so I could not understand why the Minister said that the contents of the report were nonsense? Furthermore—

Mr. Speaker: Order. I can assure the hon. Gentleman that he is not raising a proper point of order.

Mr. Patrick McLoughlin: On a point of order, Mr. Speaker. I am grateful to you for showing your understanding and sympathy for constituencies that are badly affected by outbreaks of foot and mouth disease. It is encouraging that you have informed the House that we can expect a statement some time later this week. However, we ought to have had a statement today, following the Prime Minister's summit, because our constituents are ringing us and asking us about the television and radio reports of that meeting. It would have been a little more respectful if the Government had arranged a statement today on these important matters. Many people in my constituency just want information about the restrictions on movement that are being discussed.

Mr. Speaker: Once again, I sympathise with the hon. Gentleman, but I can do nothing about the matter.

Recycling (Doorstep Collection)

Mr. Paul Marsden: I beg to move,
That leave be given to bring in a Bill to make provision for the doorstep collection of recyclable waste from all residential properties in England and Wales; to set 20-year targets for increasing levels of recycling in accordance with European Union requirements; and for connected purposes.
The Bill has cross-party support and is also supported by various environmental organisations, including Friends of the Earth. I thank Martyn and Claire from Friends of the Earth for their support in preparing the Bill. Recycling makes sense and is popular among constituents. People taking bottles, cans and newspapers to the supermarket recycling banks are a familiar Sunday sight. I have taken my children there on many occasions.
The environmental benefits of recycling are clear. It reduces the need for landfill sites, and we should remember that to meet EU targets we must reduce waste to landfill sites by 25 per cent. by 2010, and by 65 per cent. by 2020. We must reduce the need for incinerators and their potential for giving off cancer-inducing dioxins. We need to protect the earth's resources, which continue to be plundered, and we must reduce the potential for pollution.
There are clear cost benefits. Recycling aluminium cans alone could save £21 million a year, and in the process cut greenhouse gas emissions by 95 per cent., compared with the use of raw aluminium. Recycling can create jobs. Wastewatch, the organisation that prepared a report on the subject, found that a 30 per cent. recycling target could create 45,000 new jobs.
The benefits are evident. The question is how much recycling is already undertaken. Nationally, 9 per cent. of household waste is recycled. In Shrewsbury, we are above average, with 11 per cent. household waste recycling covering 87 per cent. of that rural borough. My congratulations go to Shrewsbury and Atcham borough council on what it has achieved, but I know that the council wants to achieve far more.
In their document entitled "Waste Strategy 2000", the Government set out a series of targets. Within two years, 17 per cent. of household waste should be recycled. By 2010, the target is 25 per cent., and by 2020, it is 33 per cent. In the next two years, we need to double the amount of household rubbish being recycled, but after that, the increases tail off. That is not good enough. The targets are too low.
Let us consider the position further afield. In Switzerland, 52 per cent. of rubbish is recycled, and in Holland the figure is 48 per cent. Even the United States, which is renowned for its greedy culture, recycles 22 per cent. In the Scandinavian countries, Austria and Germany, the recycling of half of household rubbish was achieved more than five years ago. The potential is massive, but we need a new partnership between businesses, councils, residents and the Government. In "Recycler Review" this month, it is reported that Daventry district council recycles up to 70 per cent., Wealden council 53 per cent. and Sutton council 44 per cent. I believe that 60 per cent. of household rubbish could be recycled, and that that is achievable in the short term. It is not rocket science; it is simply a case of being serious about recycling.
My Bill would make the process far more efficient by ensuring doorstep collection for all households. We already collect rubbish door to door, so we need only to build on the best available practices and ask people to separate waste ready for collection. Once we have created a recycling network, we can include batteries and electrical goods in addition to newspapers, tin cans, food cans in general, glass bottles and plastics. The cost, about which everybody invariably asks, is £10 per household, or an estimated £240 million a year. Where would that money come from? Last year alone, the landfill tax brought in £462 million, so all I ask is that the Treasury give half that money directly to recycling schemes so that we can extend them nationwide.
The Government—especially my right hon. Friends the Deputy Prime Minister and the Minister for the Environment—are to be congratulated on their dedication to pushing a green agenda. On 24 October last year, my right hon. Friend the Prime Minister said in a speech to the Green Alliance:
I want to see every local authority offering doorstep recycling to take advantage of these new markets.
If we harness my right hon. Friend's new determination to use the latest technology, establish partnerships between the public and private sectors and enlist public support, we can, at the dawn of the 21st century, begin the task of protecting the environment with far more recycling. Once and for all for future generations, we can then begin to save the environment as we keep promising to do.
Question put and agreed to.
Bill ordered to be brought in by Mr. Paul Marsden, Mr. David Chaytor, Mr. Lembit Öpik, Sir Sydney Chapman, Valerie Davey, Mr. Don Foster, Dr. Doug Naysmith, Mr. Torn Brake, Ms Joan Walley and Mr. Simon Thomas.

RECYCLING (DOORSTEP COLLECTION)

Mr. Paul Marsden: accordingly presented a Bill to make provision for the doorstep collection of recyclable waste from all residential properties in England and Wales; to set 20-year targets for increasing levels of recycling in accordance with European Union requirements; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Friday 6 April, and to be printed [Bill 61].

Orders of the Day — WAYS AND MEANS

Order read for resuming adjourned debate on Question [7 March].

Orders of the Day — AMENDMENT OF THE LAW

Motion made, and Question proposed,
(1) That it is expedient to amend the law with respect to the National Debt and the public revenue and to make further provision in connection with finance.
(2) Subject to paragraphs (3) to (6) below, this Resolution does not extend to the making of any amendment with respect to value added tax so as to provide—

(a) for zero-rating or exempting a supply, acquisition or importation;
(b) for refunding an amount of tax;
(c) for varying any rate at which that tax is at any time chargeable;
(d) for any relief, other than a relief which—

(i) so far as it is applicable to goods, applies to goods of every description, and
(ii) so far as it is applicable to services, applies to services of every description.

(3) Paragraph (2) above does not exclude the making of amendments with respect to value added tax—

(a) providing for refunds of the kind specified in paragraph (4) below;
(b) providing for that tax to be charged at a reduced rate of 5 per cent. on supplies of the descriptions specified in paragraph (5) below (and on equivalent acquisitions and importations); or
(c) making provision of the kind authorised by paragraph (6) below.

(4) The refunds mentioned in paragraph (3)(a) above are refunds of value added tax where—

(a) that tax is chargeable on a supply to, or an acquisition or importation by, a museum or gallery, and
(b) the supply, acquisition or importation is attributable to supplies of free rights of admission to the museum or gallery.

(5) The supplies mentioned in paragraph (3)(b) above are—

(a) supplies, in the course of a conversion of a building (or part of a building), of services related to the conversion if after the conversion the building (or part) contains living accommodation;
(b) supplies, in the course of the renovation or alteration (including the extension) of a dwelling that has been unoccupied for at least three years, of services related to the renovation or alteration;
(c) supplies of goods by a person making a supply of services within sub-paragraph (a) or (b) above if—

(i) those services include the incorporation of the goods into the building concerned (or its site), and
(ii) the goods are building materials within the meaning of Group 5 of Schedule 8 to the Value Added Tax Act 1994;

(d) supplies of children's car seats.

(6) The provision authorised by this paragraph is provision re-enacting, without altering any person's liability to value added tax or the amount of any such liability, provisions providing for that tax to be charged at a reduced rate of 5 per cent. on certain supplies, acquisitions and importations.—[Mr. Gordon Brown.]

Question again proposed.

Orders of the Day — Budget Resolutions and Economic Situation

The Secretary of State for Health (Mr. Alan Milburn): Our first duty in government has been to secure economic stability for the country. Stability is the foundation on which prosperity and progress can be built and is the basis for sustained investment in strong public services. In last week's Budget, my right hon. Friend the Chancellor of the Exchequer locked in the stability that the Government have created.
When the Government came to office in 1997, inflation was back in the system, interest rates were rising and the public finances had spiralled out of control. In the previous 18 years, the national debt had doubled and the economy had been allowed to lurch between the deepest recessions and ever-shorter periods of unsustainable growth. Mass unemployment and a growing debt burden had skewed public spending. For every £1 of extra public expenditure, 42p was being spent on servicing the national debt and paying the social security bills of economic failure.
Today, just 16p in every pound is spent on those debt and social security payments. Interest payments on debt used to exceed payments on schools, but today, schools are the Government's priority. The public finances are back under control. Interest rates, and therefore mortgages, are averaging half their rate under the previous Government. Our inflation rate is among the lowest in Europe, there are 1 million more jobs in the economy, and manufacturing, despite its significant difficulties, is expanding, investing and exporting. After decades of neglect, public investment is also growing, especially in the key services: health, education, transport and the fight against crime.
None of that has come about by chance. It has happened because of the choices that the Government have made. New fiscal rules, independence for the Bank of England, and new programmes to create jobs and to make work pay have all helped to secure prosperity and progress for our country.
Each and every step of the way, those choices have been opposed by the Conservative party. In August 1998, the shadow Foreign Secretary predicted a bleak outlook for the economy. Today, Britain has the lowest inflation that it has had for 30 years. The Leader of the Opposition said that independence for the Bank of England was dangerous arrogance. Today, Britain has the lowest long-term interest rates for 35 years.
The shadow Chancellor warned the House that a minimum wage would lose the country more than a million jobs. Today Britain has a minimum wage; it also has the lowest unemployment for 25 years. Rather than a million jobs being lost, a million have been created. Today's Conservatives, therefore, have been wrong on economic performance, wrong on the Bank of England's independence, wrong on ending poverty pay, and wrong on every prediction and forecast. Not even Michael Fish gets it that wrong. [Interruption.] I am glad that the right hon. Member for Kensington and Chelsea (Mr. Portillo) is perking up.
The Budget has been well received precisely because we avoided the temptation, to which Chancellors have traditionally succumbed, to make judgments for the short

term that could not be sustained in the longer term. The shadow Chancellor still advocates precisely that approach today. As history proves, that is an economic policy that can end only in boom and bust.
The right hon. Gentleman will recall that when he was a member of the Government in 1988, the then Chancellor, Lord Lawson, declared that there had been an economic miracle in Britain. The problem was that the then Government assumed that surpluses one year were sustainable every year. The Budget that year cut taxes by £6 billion in 1988 prices. Within just three years, Britain was in the deepest recession that it has ever seen. Where was the right hon. Gentleman at the time? He was in the Treasury, presiding over 15 per cent. interest rates, 10 per cent. inflation rates, 3 million people unemployed, 1 million people in negative equity and a £50 billion public sector borrowing requirement. That truly was a recession made in Downing street. Today, he claims to have enough credibility to run the economy. Frankly, with his record, he does not have the credibility to run a bath, never mind the economy.
Last week, my right hon. Friend the Chancellor of the Exchequer consciously took a balanced approach, involving the repayment of national debt alongside targeted tax cuts for hard-working families; help for pensioners, motorists and savers alongside action to increase employment opportunities; and new measures to boost private sector productivity alongside prudent public sector investment.
The national health service is a major beneficiary of our approach. The NHS in England will receive an average of £275 million extra a year for the next three years. That is in addition to the record levels of investment that we are already making. Health service spending is now growing by an average of 6.6 per cent. a year in real terms this year and over the next three years. In the previous Parliament, when the right hon. Gentleman was in the Treasury, health service spending grew by just 2.6 per cent. Indeed, in the previous Conservative Government's last year in office—with him in the Cabinet alongside the Leader of the Opposition—they cut health service spending in real terms.
Today, under a Labour Government, the NHS is the fastest growing health service of any major country in Europe. The whole nation knows that there is a huge amount of catching up to do. Real problems remain in the health service, but real progress is being made too. This year, for the first time in years, the NHS overall will balance its books. Just as we have sorted out the state of the overall public finances, so our prudent management has paid off the NHS debts that we inherited.
Hospital waiting lists have fallen below the 100,000 target that we promised at the previous general election, and outpatient lists are now falling as well. There are improved waiting times for cancer patients. More heart operations are being carried out than ever before. For the first time, cancer and cardiac services for prevention and for treatment are receiving earmarked funding worth hundreds of millions of pounds.
This year, for the first time in 40 years, there are more beds in hospitals. The biggest new hospital building programme in health service history is under way. When the right hon. Member for Kensington and Chelsea was Chief Secretary, he cut capital investment in NHS buildings and NHS equipment by almost 6 per cent. in


real terms. Capital spending in the NHS was lower at the end of the previous Parliament than at the beginning. Over this Parliament, capital investment is growing again by an annual average of almost 10 per cent.

Mr. Nick St. Aubyn: Even in my own West Surrey health authority area, the number of beds in the system has been cut by 25 per cent. since the Government came to power. If the investment is coming through, it follows some of the most savage cuts ever witnessed made in the shortest time on record.

Mr. Milburn: With due respect, the hon. Gentleman is on shaky ground. After all, over just 10 years, his party in government cut NHS beds by 40,000. This year, for the first time in 40 years, the number of NHS beds is growing. Indeed, during the next few years, that number will grow still more precisely because of the investment that we are making in the NHS—investment that the Conservative party still refuses to match. The biggest problem that the NHS faces is a shortage not of cash or even of the latest equipment or modern buildings, but of capacity.

Dr. Peter Brand: Does not the Secretary of State recognise that there is still a shortage of cash as a result of the Government accepting two years of Tory spending plans? A lot of the extra spending goes to meet previous deficits. I hope that I can share his optimism that, a year from now, we shall see some real outputs, but the majority of health authorities are still in debt.

Mr. Milburn: That is not the case. I can tell the hon. Gentleman, who is normally more assiduous on such issues, that this year, for the first time in seven or eight years, the NHS overall will balance its books. The extra money does not go to paying off debts. It goes on new hospitals, new primary care premises, extra pay for nurses and doctors and more doctors, nurses, therapists and scientists.
The Liberal Democrats tell us that not enough money is going to the NHS, but at the previous general election they promised a meagre increase of only £700 million a year, which is dwarfed by the amount that we have invested. The Liberals are in danger of becoming the Oliver Twists of modern party politics—they always beg for more and nothing is ever enough. They always want to spend money that they do not have.
The problem in the NHS is not so much a shortage of cash as a shortage of capacity and of trained qualified staff—doctors, nurses, midwives, therapists and scientists—who have the skills on which NHS patients depend. Those staff are the best asset of the NHS and the NHS simply needs more of them. Here, we have made a start.
There are 17,000 more nurses working in the NHS than when we came to office. There are 6,700 more doctors, but we need to do much more. The NHS is still short of doctors, nurses and other qualified staff. The NHS plan, which we published last year, sets out our ambition to have by 2004—compared with the l999 position—20,000 more nurses, 7,500 more consultants and at least 2,000 more general practitioners working for the health service.
Last week, my right hon. Friend the Chancellor outlined a new £135 million fund to help us to achieve those ambitious plans for staff expansion in the NHS.

Today, I can give the House the details of how we shall deploy those extra resources. I begin with nurses, who are the backbone of our health service. From this Government, they get the recognition and, indeed, the pay rises that they deserve—pay rises paid in full rather than staged. There is extra pay, too, of up to £1,000 in those parts of the country where shortages are greatest and the cost of living highest.

Mr. Michael Fallon: Will the Secretary of State reconsider the criterion for his cost-of-living supplement, which classifies the whole of west Kent—including high-cost areas in Sevenoaks and Tunbridge Wells—as not eligible, while towns much further away, such as Swindon and Portsmouth, seem to qualify?

Mr. Milburn: Of course that issue, which the hon. Gentleman has raised with me before, is one that we keep under review. This is the first year in which there will be an increase in the cost-of-living supplement, targeting extra money on areas where we know that, for a variety of reasons—largely to do with property prices—the cost of living is highest. We will continue to keep the matter under review, and I am aware of the representations made by him and, indeed, many of my hon. Friends about the situation in Kent.
Not every nurse shortage problem has been solved, but progress has been made. Under the present Government—but not under the last—nurse numbers have risen every year: they have risen by more than 6,000 in the last 12 months alone. Nurse training places, which were cut in the last Parliament—incidentally, at precisely the time when the right hon. Member for Kensington and Chelsea had his fingers on the purse strings—have risen under this Government. Training places are up by 36 per cent., and there has been a 56 per cent. increase in United Kingdom applicants for nursing and midwifery courses.
There is more that we can now do. We will take three steps. The first relates to nurses who are considering returning to work in the NHS. In the last two years, more than 7,000 nurses who left the health service have rejoined it. Many may not have been in nursing for many years, and may need training to get them up to speed with modern practice. Return-to-work courses last an average of 12 weeks. Currently, there is no direct financial support for nurses during that period of retraining; that is a significant disincentive, which I intend to remove. From next month I will introduce a new payment for nurses, midwives and other health professionals who are retraining for a return to work in the NHS. Each payment will be worth at least £1,000. We will consult nursing and other unions on how best to make the new payments work.
Secondly, there will be more help for nurses with child care responsibilities. About 50 per cent. of nurses have children, and many find it difficult to combine their family and work responsibilities. In the NHS plan, we committed ourselves to spending more than £30 million by 2004 to provide more child care, including 100 on-site nurseries. Today I intend to go further: I will increase spending by half—by £15 million—over the next two years, to provide a further 50 new NHS nurseries. I can confirm that no new NHS hospital development will get the go-ahead unless it contains plans for such a workplace nursery.
Thirdly, we will increase the incomes of student nurses, midwives and therapists. For much of the 1990s, the student bursary was frozen; in the last three years we have increased it. Each of the 50,000 students currently studying for a nursing diploma now receives £4,805 a year.
Student nurses are crucial to the future of the health service. One in six currently give up a course before completing it, and that must change. Student nurses deserve more than they are getting now. I can announce that, from September, each student nurse studying for a diploma will receive a £500 bursary increase. That is a 10.4 per cent. rise, and it will extend to all NHS-funded students studying for degrees. It is the biggest increase since the bursary was introduced in 1989.
Let me say something about family doctors. General practitioners do a brilliant job for the NHS. They are working under real pressure; we have shortages of GPs, and we need more of them. Under the last Government, GP training numbers fell by more than 20 per cent., which has cost the NHS more than 700 family doctors. After big reductions in the number of GP registrars in the mid-1990s, their numbers have risen by more than a quarter.
In the NHS plan, we said that we wanted to increase GP numbers by at least 2,000 by 2004. We have already taken action to improve both recruitment and retention, but today I can go further still.
First, we want to retain GPs in the NHS. So today I can announce that GPs who continue working in the NHS beyond 60 will receive a golden thank-you payment on their 65th birthday as an incentive to remain in general practice. On their 60th birthday, £10,000 will be set aside. On their retirement, they will receive the lump sum plus interest.
Secondly, many family doctors have left general practice but could be persuaded to return—[Interruption.] Even the hon. Member for Isle of Wight (Dr. Brand) might be persuaded. With the prospect of a general election around the corner, he should think about it. It might be a good career opportunity for him.
The improvements that we have already made to the GP retainer scheme have enabled more than 1,000 GPs, mainly women, to keep in touch with practice. I intend to do more. From next month, I propose to pay up to £5,000 to GPs on the scheme who return to a permanent post, either full-time or part-time, in the health service.
Thirdly, I want to deal with the imbalance between the supply of GPs and the health needs of the poorer parts of the country. The Government are determined to tackle the health inequalities that scar our nation. We have set new demanding targets to help us do so. Currently, the areas with the greatest health needs often have the lowest numbers of family doctors. The introduction of the new personal medical services contract is of course helping to deal with that historic problem.
Today, we can take another step. From next month, we shall make payments of £5,000 to every new GP who chooses to practise in an under-doctored or deprived area for at least three years. Places that will benefit include Barnsley, Brighton, Bristol and Birmingham. The new incentives will be good for family doctors, good for the

health service and, above all else, good for families in those parts of the country where, for too long, there have been shortages of GPs.
Our country as a whole is short of family doctors. So today I am making available extra funding for training GPs and for supporting newly qualified GPs in all parts of the country. There is one further step that I want to take to make general practice a more attractive career for young doctors. I have already announced the £5,000 extra for GPs who choose to work in deprived areas. I can also announce that, wherever they work, in any area, north or south, rich or poor, every new family doctor will receive a £5,000 payment for working in general practice in the health service.
Details will be discussed with GP representatives, but the package that I have been able to announce today will involve new GPs in all parts of the country receiving £5,000, with new GPs in the poorest parts of the country receiving a total of £10,000. Those measures are an important recognition of the work that family doctors do and the need to make their careers more rewarding.
The measures that I have taken today—for nurses, midwives, therapists and GPs—will help to expand the numbers of those key staff working in the health service. In the next few years, the measures will help to bring more family doctors than ever before, and an average of 5,000 extra nurses per year, into the NHS. Consequently, patients will receive better, faster treatment.
As a Government, we can make that investment because of the choices that we have made. As the Budget makes clear, our choice is for economic stability, for targeted tax cuts that are affordable and for extra investment in our key public services. As announced in the Budget, spending growth will now average not the 3.4 per cent. annually that was promised in the spending review, but 3.7 per cent. annually in the next three years. That investment is targeted at our priorities: health, education, transport and the fight against crime.

Mr. John Bercow: Perhaps uncharacteristically, I should like to put an entirely non-partisan question to the Secretary of State. Is he aware that 1.4 million people have been diagnosed with diabetes, but that another estimated 1 million people have not been diagnosed? Is he also aware—I suspect that he is—that serious complications can result from late diagnosis, including heart trouble, kidney failure and even blindness? In the light of those disturbing facts, will he endorse the call by Diabetes UK for commitment to the diabetes pledge, which is a pledge for the Government to commit themselves to a thorough and continuing screening programme?

Mr. Milburn: The hon. Gentleman makes an extremely important point. Diabetes is a disease that affects very many people in our country. If it is not diagnosed and treated early, it can have precisely the effects that he described.
The hon. Gentleman will be interested to know that I hope over the next year or so to put together a new blueprint for improvements in diabetes services. The new national standards will apply everywhere, and not just in one part of the country. He will be aware that there is a lottery in care in diabetes services, but that lottery has existed for too long in too many NHS services. However, the choices that we have made and the investment that we are putting in means that we can change that.
For example, the hon. Gentleman will know that diabetes patients need the support of social services as well as of the NHS. The question for him is whether the shadow Chancellor will promise at the Dispatch Box to match the Government's increases in spending on social services and on the NHS. The hon. Gentleman should understand that I mean not only the social services spending that comes from the Department of Health, but the local government spending through the Department of the Environment, Transport and the Regions. The hon. Gentleman's constituents—those who are diabetes patients, and those who are not—will be listening carefully to what the shadow Chancellor has to say on the matter.
The Government are to increase public spending by 3.7 per cent., but the shadow Chancellor, in contrast, has committed the Conservative party to spending rises of just 2.25 per cent. a year, or even less. How will the Opposition fill the spending gap? That is the challenge that they face. If they grow spending at just 2.25 per cent. a year, they will have to cut the Government's spending plans by more than £16 billion by 2003–04. If they postpone cuts for just one year—as they now say they will—they will have to find more than £10 billion of cuts over the following two years.
As the Opposition have failed already to find £8 billion of savings to close the spending gap, there is precisely no chance that they will find £10 billion in savings unless they do what they have promised to do in the past—cut into the country's vital public services. Those services—health, education, transport and the fight against crime—are now under threat from the choices made by the Conservative party and the shadow Chancellor. They have chosen unaffordable tax cuts, instead of investment in our key public services.

Mr. St. Aubyn: Wrong.

Mr. Milburn: The hon. Gentleman says that that is wrong, but he should read more carefully what the right hon. Member for Kensington and Chelsea has had to say on the matter. Otherwise, he—and, I suspect, his constituents—will be in for a surprise at the next general election.

Mr. St. Aubyn: Surely it has entered the Secretary of State's brain that the tax cuts proposed by the Conservatives amount to £8 billion, not £16 billion. They have all been carefully costed outside the areas of health and education that we are discussing this afternoon.

Mr. Milburn: Careful costing is not the preserve of the right hon. Member for Kensington and Chelsea, his Front-Bench team or today's Conservative party. They cannot commit to invest to modernise the NHS, so that is why they are now committed to privatising it. We know that from what the shadow Chancellor and other Conservative Members have said. The shadow Chancellor could not have made it clearer. I think that it was in October last year that he told the "Today" programme that he expected those who were able to do so to make "a little extra contribution".
Day by day, the Opposition's economic policy becomes more threadbare. They claim savings that they cannot make, they make tax cuts that they cannot afford, and they

make spending pledges that they cannot meet. It would be laughable were it not so serious. The party that once naturally assumed the mantle of economic competence now lives on the never-never, in a world of fantasy economics, spurious spending pledges and unsustainable tax cuts.
The Opposition's policies do not make sense. Their sums do not add up: they are unaffordable, unsustainable and unbelievable. The choice before the country could not be clearer—between policies that bring economic stability and policies that would bring a return to boom and bust, between sustained investment in public services and a return to cuts in public services, and between an expanding, reforming NHS and a contracting, privatising NHS.
Those are the choices for Britain. They are the choices today, and they will be the choices at the next general election.

Mr. Michael Portillo: I refer the House to my declaration in the Register of Members' Interests.
I believe that the House will not be overly grateful to the Secretary of State for coming here this afternoon and making a series of announcements that we all read about in this morning's newspapers and heard about from this morning's media. It is typical of the Secretary of State and of the Government to display such discourtesy towards, and contempt for, the House of Commons.
Every time the Government announce more money for the national health service, they tell us that they will revolutionise the service, but nothing ever improves. Before the last election, the Prime Minister stood in front of posters that said that waiting lists would be shorter, but, in fact, they are longer. Doctors in today's national health service are forced to put Ministers' political priorities ahead of patients' clinical needs, which means that the sickest patients are often those who are made to wait the longest. There are 20,000 nursing vacancies in the national health service. The Government promised to end postcode prescribing, but they have not. They promised to end mixed-sex wards, but they have not. They have imposed dogmatic restrictions on new consultants, which means that many doctors could be leaving the national health service.
Nothing that the Secretary of State said today was new because we had already read it. Nothing that he said today changes any of the underlying conditions in the national health service.

Mr. Milburn: Will the right hon. Gentleman clarify one aspect of policy? He has made much of matching our spending on the national health service. Will he give a cast-iron guarantee that, were there to be a Conservative Government, he would match our social services spending across the piece and not just in the Department of Health?

Mr. Portillo: The right hon. Gentleman has obviously forgotten a lot since he left the Treasury. The Government are not in a position to guarantee social services spending because much of it is controlled by local government.
We have illustrated our £8 billion of savings against the Chancellor's plans; they could be made without affecting social services. We have not had to propose any


reductions in the Government's plans on social services. The right hon. Gentleman knows that perfectly well. That is what made the last part of his speech so appallingly shabby.
This year's Budget, like all the Chancellor's Budgets, has unravelled very quickly. Now that we have had a chance to study the details, six points emerge. First, it is evident that the Chancellor's speech was, as usual, more spin than substance. That has become a new Budget tradition. Secondly, the Chancellor's claims about economic management completely ignore the golden inheritance that we bequeathed him. In his review of the economy, the right hon. Gentleman completely overlooked the fact that most of our competitors are doing better than we are.
Thirdly, the Budget continues the process of undermining this country's competitive position. Fourthly, it confirms that the Government plan a programme of unsustainable increases in tax and spending. Fifthly, the Chancellor continues his mission of taking money in taxes from those who can ill afford to pay them and forcing them to go cap in hand to the Government for benefits. Sixthly, the Budget did nothing to reduce Government waste and bureaucracy, so that despite the relentless increases in taxation that the Chancellor has imposed, our public services are actually getting worse. The Government have taxed more and delivered less.
Under this Chancellor, the Budget speech has become a series of soundbites, intended to mislead rather than inform. For example, the Chancellor claimed that the rate of increase in Government spending was to rise from 3.4 per cent. to 3.7 per cent., something that the Secretary of State for Health dwelt on towards the end of his speech. More plainly, the Chancellor meant that he had underspent this year by £3.4 billion, that he would underspend over three years by £5 billion and that the figure for 2003–04, which is the last year of his plans, is virtually unchanged. That is a very curious way of presenting his figures.
Similarly, the Chancellor greatly overdid his pre-Budget spinning. The House will remember that there was much talk of tax cuts in advance of the Budget. In the event, the Chancellor brought forth a mouse. The flagship of his tax cuts was his plan to widen the 10p band of income tax. Now that we have analysed it, it turns out to be worth 69p a week.
When people next go to the petrol station and see that Britain still has the most expensive fuel in Europe and that it still costs £50 to fill the tank of a Mondeo, I do not think that they will feel overly grateful to the Chancellor of the Exchequer for the fact that he has allowed them to keep an extra 69p. After 45 stealth tax rises, the right hon. Gentleman has responded with a miserly 69p.
The Chancellor approached the Budget with a very large surplus, but it is not his surplus; it is the people's surplus. The Government's money is not theirs; it is the people's money. The people have been overtaxed and they had every reason to expect that they would get their money back in this Budget.
The Chancellor trumpeted his tax cut, which turned out to be worth 69p, but he did not want to talk about the new taxes that he had invented. Even in an election Budget,

he managed to smuggle in tax rises, for example, £2.90 a week more in national insurance for people earning more than £28,400 a year. There was a new energy tax, which the Confederation of British Industry said will seriously damage United Kingdom competitiveness. Council tax is up on average by £1 a week. A new tax on quarrying will be introduced next year. There are higher fuel scale charges for those who have company cars and extra value added tax is to be imposed on spectacles. None of those merited much of a mention in the Chancellor's Budget speech.
The Chancellor was not much more frank when he spoke about the economy, which has been growing not, as he would like us to believe, since May 1997, but since the beginning of 1992. By definition, five of those nine years were under the previous Government. Unemployment has been falling not, as the Chancellor would like us to believe, since May 1997, but since the middle of 1993. Indeed, it has been falling more slowly since 1997 than it did between 1993 and 1997.
It is true—I give the Chancellor this point—that economic growth and falling unemployment enable Governments to spend less on debt interest and on benefits for people who are out of work, but the foundations that brought about those possibilities and changes were laid by the Chancellor's predecessors. In fact, the proud boast of this Government is that, uniquely among Labour Governments, they have not reversed the improving economic trends that they inherited—they have merely slowed them down.

Mr. Robert Sheldon: I grant the achievement of the right hon. and learned Member for Rushcliffe (Mr. Clarke), but four years have been added to the period from 1993 to 1997. Has the right hon. Gentleman ever known eight years of such stability in the post-war years?

Mr. Portillo: It was the 18 years drubbing that the Labour party took in opposition that at last convinced it that it had to commit itself to sustainable economic development and the control of inflation. However, I am about to come to the right hon. Gentleman's point, as I think that it is not sufficient for the Chancellor of the Exchequer or the right hon. Gentleman to say that we have had growth for a long period and that that has not happened before.
We are in a new world and it is not sufficient to say that we are growing. What matters is whether we are growing by comparison with our competitors and the answer to that question is that we are not; we are under-performing the competition. The Chancellor and the right hon. Gentleman need to bring themselves up to date. We may have longer economic cycles, but that is no reason for complacency. This country must benchmark itself against the performance of other countries.
If they have proved anything, the past four years have proved that the spending plans of the previous Government were economically sound. The Secretary of State for International Development claimed last week that the Government had been prudent for the first two years, thereby betraying the fact that they had ceased to be prudent now. The Chancellor stuck to the Conservative spending plans for two years and, sure enough, he has got his reward for doing so. We do not yet know—we cannot


know it because it is too early—what will be the economic cost of the rapid acceleration in Government spending that started last year: the return to Labour's tax and spend policies.
In answer to the right hon. Member for Ashton-under-Lyne (Mr. Sheldon), the long period of growth that Britain has experienced should not be a reason for complacency. What matters is how well we are doing by comparison with our competitors. During this period of Labour Government, our rate of growth has been half that of the United States and lower than the average rate of the eurozone. Our productivity is growing at half the United States rate; the rate of growth was 50 per cent. higher under the previous Conservative Government. Unemployment has fallen, but 14 OECD countries have had a better record on unemployment during the period that the Labour Government have been in office.
We have rapidly lost our share of world trade, which went down from 5.1 per cent. to 4.5 per cent. in only three years. Our balance of payments shows an £18 billion deficit and the Chancellor expects to double that during the coming years—I have every confidence that this Chancellor of the Exchequer will do so.
It is true that during the 1980s and 1990s, Britain developed a reputation for being competitive. That reputation was based on maintaining lower taxation in this country than in Europe and on creating flexible labour markets. British companies succeeded and inward investment flowed. During the past four years, however, the Labour Government have begun to reverse those hard-won gains. The Red Book shows that the burden of taxation has risen by 3 per cent. of national income. Under the Labour Government, since the Chancellor came to office the tax burden has risen by £28 billion. None the less, the Prime Minister takes every opportunity to tell the House that the tax burden is not rising, but falling—something he could accomplish only by holding the graph upside down.

Mr. Michael Fabricant: My right hon. Friend describes the balance of payments problem that this country is encountering and the increased tax burden we face. Is he aware that the OECD has said that since 1997, because of the increased tax burden and regulation imposed by the Labour Government, our competitiveness has fallen from fourth to ninth place in the world league?

Mr. Portillo: My hon. Friend is right. Those are new figures. When the Government came to office, we were in fourth place in the competitiveness league. By 1999, we had fallen to eighth place and figures that have just been published show that we have fallen to ninth place. That is hardly surprising, not only because of the relentless increase in taxation and regulation under the Labour Government, but because other Governments are moving in the opposite direction. That is why we are losing competitiveness.

Mr. Bercow: Does my right hon. Friend recall that, for 15 successive years, the previous Conservative Government published an assessment of the impact of both direct and indirect taxes on the average family and on families in other income deciles? Is it not a disgrace that the current Chancellor has refused to continue that sensible practice? Was it not, therefore, entirely appropriate that, in March 2000, the Select Committee on

the Treasury published a report that criticised the Chancellor for his failure in that regard, denouncing him with particular severity at paragraph 35?

Mr. Deputy Speaker (Sir Alan Haselhurst): Order. Before the right hon. Member for Kensington and Chelsea (Mr. Portillo) replies, may I point out to the hon. Member for Buckingham (Mr. Bercow) that he needs to practise brevity? He has had a great deal of opportunity—I am looking at the length of his interventions.

Mr. Portillo: My hon. Friend the Member for Buckingham (Mr. Bercow) was right on both counts. It is indeed a disgrace that the Chancellor suppressed information in that way and he was criticised by the Select Committee. However, I am not sure that it makes much difference whether the information is published. Information on the tax burden is published, but we cannot get the Chancellor or the Prime Minister to admit to the House what it says—that the tax burden is rising. They simply refuse to admit the truth. They are capable of any amount of wriggling in order to avoid addressing the fact that the tax burden has risen under the Labour Government.

Mr. Bill Rammell: Does the right hon. Gentleman recall that the Red Book for the last Budget delivered by the right hon. and learned Member for Rushcliffe (Mr. Clarke) predicted that the tax burden would rise during every year from 1997 to 2002? Why did the Conservatives propose that rise?

Mr. Portillo: I recall clearly that the tax burden fell by 2 per cent. when I was at the Treasury—[HON. MEMBERS: "Ooh!"] Hon. Members are hopelessly ignorant. I was at the Treasury with my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke). The tax burden fell by 2 per cent; it was 5 per cent. lower than at present. I just want the House to focus on that fact. The tax burden has risen by 5 percentage points from where it was under the last Conservative Government. That is an extraordinary change in the tax burden.
Our competitive advantage is being whittled away. PricewaterhouseCoopers estimates that two thirds of the competitive advantage that Britain enjoyed in the mid-1990s has been frittered away. As the Government remorselessly impose taxes on business and impose regulation, other countries are cutting their taxes. The Labour Government are swimming against a global tide, blunting Britain's competitive edge while other countries are busy sharpening theirs. The CBI estimates that the extra burden of tax on business is £5 billion a year, and the Institute of Directors estimates that the extra burden of regulation on business is £5 billion a year, yet the Secretary of State for Trade and Industry just haughtily dismisses all the worries of business.
In this election Budget, the Government have added a higher minimum wage and have extended paternity leave, without—

The Chancellor of the Exchequer (Mr. Gordon Brown): Maternity leave.

Mr. Portillo: So, the Chancellor of the Exchequer can listen sometimes. That is very revealing. I am so sorry; I thought that the Chancellor of the Exchequer was


involved in a much more interesting conversation. I did not think that he would be listening to me, but I am very pleased that he has been.
The Chancellor should, however, have listened to the end of the sentence. The Government have added a higher minimum wage and have extended maternity leave, without any commitment to make offsetting reductions in the administrative burden elsewhere. The Government should, for example, commit themselves to remove from employers their responsibility to pay the working families tax credit. That is something that should be paid by the Government to parents, who have responsibility for the children.
The Red Book reveals that the Government's receipts from corporation tax are to rise by £5.7 billion in the coming year. The Chancellor of the Exchequer never indexes the thresholds for corporation tax; he just gets a windfall every year from business. After all, business does not have votes, so what does it matter to the Chancellor of the Exchequer? Surely those windfall gains should have prompted the Chancellor to do something for the businesses that are in difficulty at the moment; for manufacturing, which Labour Members are meant to represent; for small businesses everywhere; and for farming. Instead, he used this Budget as another opportunity to demonstrate his complete indifference to the suffering of those sorts of business.
Many Labour Members know that people in the countryside are deeply dismayed that the Budget offered absolutely nothing to them in their hour of need.

Mr. Christopher Leslie: The right hon. Gentleman is talking about burdens on business. I understand that one of his proposals for savings is to privatise industrial injury compensation benefit and make businesses take out insurance policies against disease or injury that may befall their employees. Is that not a burden?

Mr. Portillo: When we announced that proposal, we said that we would relieve the burden for business elsewhere, and we have a series of proposals to do so. [Interruption.] Ministers crow and groan because they have never heard a straight answer before. [Interruption.] That is right; things must add up. The Chancellor of the Exchequer would always talk about the national insurance reduction without talking about the climate change levy, for example. I say that if a change is made, an offsetting change must be made elsewhere. I believe that it is absolutely responsible that employers should be obliged to insure their employees against industrial injury, because then they have an even greater incentive to ensure that their employees are safe. If the hon. Member for Shipley (Mr. Leslie) thinks that it is wrong to do that, let him get up and campaign. I am sure that his opponent in Shipley will be happy to take him on on that exact territory.

Mr. Patrick McLoughlin: May I take my right hon. Friend back to the points that he made on the countryside? He said that many people would have been very disappointed to have heard nothing about

the countryside in the Budget. Why should they be disappointed? After all, as far as the Government are concerned, the crisis is over.

Mr. Portillo: Ministers have made a series of very unwise statements that are reminiscent of the Prime Minister's statement during the fuel crisis. The House will recall that he said that it would all be over in 24 hours. That leads us to a broader point. The whole of the Chancellor's strategy is based on never-ending economic growth. Ministers as a group put themselves in a very precarious position when they make such predictions—when they commit themselves to controlling things that are inherently uncontrollable—but the Chancellor is an example writ large of what my hon. Friend the Member for West Derbyshire (Mr. McLoughlin) has just pointed out in relation to agriculture.

Mr. Matthew Taylor: The shadow Chancellor has just clarified the extra costs involved in industrial injuries benefit—incidentally, this year's pay-out is £750 million, which is a burden on business. Will he clarify whether the abolition of the energy levy will be paid for by increasing employers national insurance, the tax on jobs, under his plans?

Mr. Portillo: The Chancellor of the Exchequer has promised to reduce people's national insurance in return for the energy levy. The energy levy is an absurd, bureaucratic tax, which will make no difference to our environment. However, it will be extraordinarily damaging to manufacturing, farming, small businesses, newsagents, pubs and all sorts of businesses in this country. Yes, I proudly say that I would reverse it absolutely.
The Chancellor is raising spending much faster than the economy's underlying; growth rate. He is doing so just when caution would suggest that we should be prudent, given the slow-down in the United States and as other Governments around the world are being prudent. It is no wonder that the European Union and the International Monetary Fund have criticised the Government for their lack of prudence; nor that the Financial Times has said that the Chancellor's self-advertised prudence is now much more a matter of faith than of fact.
The Chancellor's policy is based on being able to increase the tax burden without limit. He has made a lot of his so-called golden rule that the Government should borrow only to invest, but he offers us no definition of the word "investment". Indeed, he daily abuses the word "investment" and now uses it as though it were absolutely the same as the world "spending", even though we all know that the Government waste much of the money that they spend. We all know how much money was invested in the dome, and we all know what we have to show for it. If the Chancellor's rules have any effect at all—

Mr. Giles Radice: What are the right hon. Gentleman's rules?

Mr. Portillo: I am coming to my rules; they have all been set out, and I shall set them out again in this speech.
If the Chancellor's rules have any effect at all, it is merely to impress on him that if he is to spend a lot, he must tax a lot—a point fully demonstrated by his first four


years. His rules allow him to spend and tax any proportion of gross domestic product. Irrespective of whether the figure is 40 or 50 per cent., or whatever, it fits his rules so long as taxing and spending increase together.
The Chancellor is committed to a path of Government spending that will require further tax rises, if he wins the next election. As the Institute for Fiscal Studies said:
If spending is to grow by more than GDP growth beyond 2003–04 then further increases in taxes will be required.
That is undeniable, and because it is undeniable we can expect the Chancellor to deny it with ever-mounting bluster. Perhaps he would like to begin his denials now. No, apparently he would not, but in due course he will, no doubt, deny what the institute says and plain common sense. Increasing public spending relentlessly faster than the growth rate of the economy means that he will have to raise taxes again. Again, they will be stealth taxes, directed at the poorest members of society.
It is clear that the Chancellor will need to raise taxes further because he can take one of only two positions: either he continues on his current spending path, which means higher taxes; or he admits that Conservative policy on spending is right and he reduces his spending after the three years of his plan. I am absolutely confident that he has put behind him his days of Tory prudence, so I have no doubt that he wants to increase taxes.
The Chancellor may resemble his Labour predecessors in his addiction to tax and spend, but there are differences between him and his predecessors. Previous Labour Governments prided themselves on taxing the rich; this Government pride themselves on mixing with the rich and taxing the poor.
The Chancellor has been too cunning to raise income tax rates, so he has adopted every sneaky means of raising revenue, most of which have fallen most heavily on those least able to pay. There have been 45 stealth taxes. He patronisingly believed that his tax increases were too complicated for most people to understand. He does not care that the tax on pension funds will make people much poorer in their retirement than they would otherwise be. All that matters to him is that people should not find out that that is the case before the election.
The Prime Minister betrayed the Government's real cynicism in answering questions last week. He chose to defend his Government's attack on our pension funds on the ground not that his policies are in any way morally defensible, but that, as it happens, the stock market has risen. That speaks volumes for this Government. They do not think that they have to explain to people why they have the right to take away their hard-earned money; they assume that people should give them a good reason why they should be allowed to keep it. That, in a nutshell, is the difference between the two parties.
The Chancellor's stealth tax policy was rumbled last September with the fuel protests. He had been too clever by half. No pensioner could overlook—I do not believe that any pensioner will ever forget it—the cynicism with which the Chancellor raised the price of petrol by the rate of inflation, which he calculated at 3.4 per cent., and raised pensions by the rate of inflation, which he calculated at 1.1 per cent. When he was shadow Chancellor, he told a Labour conference that he would do away with the means-testing of retired people, but what he has actually brought about is the most massive increase in dependency. Well over half our pensioners—56 per

cent. of them—will be required to reveal their intimate details to the state in the hope that they may be granted an income sufficient to pay the Chancellor's 45 stealth taxes. The form that they are asked to fill out runs to 40 pages and it even asks pensioners whether they are expecting a baby.
There is a better way. We should leave people with more of their own money. This is not just about economics; it is about creating a better society—one in which people are encouraged to save for the future and are rewarded for doing so. People who save have more choices, can face the future with more confidence, and are better able to take responsibility for their families and to recognise their wider obligations to society.
The Conservatives recognise that the money politicians spend is not their money. We do not believe that we know how to spend it better than the people who earned it. We do not adopt a tone of moral superiority when we take hard-earned money from parents, who would have spent it on their children, and, instead, hurl it into the bureaucracies of the state.
The Conservative party will campaign on removing savings from income tax. Why should people who have paid income tax on the money that they have earned then be taxed again if they decide, instead of spending their money straight away, that they will put some of it into savings? We want pensioners who have saved to enjoy independence in their retirement, because that was the very reason for which they saved in the first place. We want them to be able to look back on a lifetime of savings and believe that they did the right thing and that they were rewarded for doing so.
The Chancellor boasts of 7 million pensioners who will pay no tax or pay only at the lowest rate. There are two ways of increasing that figure of 7 million. The Chancellor's way is to tax pensions funds and discourage saving. In that way, the majority of people reaching retirement will have incomes too low to pay income tax, and the Chancellor can gloat as, year by year, the figure of 7 million increases.
However, there is a different way—our way—which is to encourage saving and to reward those who have saved by a massive increase in the income that they can have before they pay tax. In that way, pensioners will be better off and fewer of them will pay tax. We shall take 1 million of the pensioners who currently pay tax out of income tax altogether and, for many of the remainder, the weekly tax bill will be reduced by £8.50 a week.
The Chancellor boasts of helping families. Again, there are two ways to do that. The right hon. Gentleman has created hugely complicated systems of dependency, which trap more and more people in the indignity of the means test. The Conservative way is to simplify the system and leave people with more of their own money to spend or save as they wish.
We shall also remove the tax from the widowed parents allowance and give married couples more choice about whether to work or not to work, enabling a man or woman to transfer his or her allowance to the spouse. Each of those two reforms will be worth about £20 a week off parents' tax bills.
After the Budget, we should perhaps be grateful for small mercies. I do not mean the crumbs that the Chancellor has handed back, but the collapse of most of the Government's economic arguments. Until recently,


they claimed that it was impossible simultaneously to cut tax and spend more on services. I think that we will hear rather less of that economic illiteracy from now on. In the late summer, the Prime Minister claimed that petrol tax could be reduced only if hospitals and schools were closed. As he now claims to have cut the price of fuel, we should expect to see the list of closures.
Over the winter, the Labour Party spent millions on advertisements that referred to the Tories alleged £16 billion of public spending cuts. In his Budget speech, the Chancellor was forced finally to abandon that false claim. In fact, our policy is to raise Government spending in line with what the country can afford, which is by very large amounts.
The Conservative campaign, "You've paid the tax, so where are the improvements in public services?", has been rather more successful. The Government spend money with extraordinary incompetence. How do they manage to tax so much and end up with 2,500 fewer police officers? How could they take so much money from retired people in extra taxation and in return ask those same elderly people to wait still longer before they can have an operation that will transform their quality of life?
On education, I received a letter today from a head teacher in Wales, who says:
The governors are finding it more and more difficult to support the excellent teaching staff … with the limited and reducing funds at their disposal, whereas the publicly announced Budget"— [Interruption.]
I know that the Government like to intimidate people and to yell down any public servant who dares to speak up, but I am quoting a head teacher. She says that
the publicly announced Budget proclaims that the government is spending more on schools. Not at this school, they aren't!
That is what people are saying.
Throughout the country, even people who voted Labour are frantically calling on the Government to improve services, not to produce meaningless statistics, to double count, to spin and to blame the previous Government. They just want them to do something that means that we can have better schools and hospitals and make our streets safer. The Chancellor's response in his pre-election Budget was to move from double counting to triple counting. He claimed to be adding £1 billion to health, but it turns out to be £290 million in 2003–04. The Secretary of State for Health did not even attempt to repeat the Chancellor's claim, which demonstrates that the deception did not survive even the first 24 hours after the Budget and merely added powerfully to the Chancellor's reputation for being unable to represent any figure accurately and fairly.

Mr. Fabricant: Is my right hon. Friend aware that health authorities have informed me that the Government have increased funding for the NHS assuming inflation of 2.5 per cent., whereas inflation in the NHS is now running at 5.2 per cent.?

Mr. Portillo: I am pretty sure that the Government are doing exactly as my hon. Friend says, and calculating their increases using an inflation factor that is flattering to them. My hon. Friend can also count on the fact that they will use the much higher NHS inflation factor when

they calculate the figures under the previous Government. That will almost certainly be part of their subterfuge and double counting. Fortunately, no one believes anything that the Chancellor says any more.
In place of spin and double counting we shall introduce truly rigorous economic disciplines. We shall have our own currency, and interest rates will be set in Britain. We shall enhance the independence of the Bank of England and appoint an independent committee of economic advisers. We shall ensure that there are proper national accounts to end the Chancellor's fiddled figures and we shall increase Government spending within the limits of what the nation can afford. We shall set about making Britain competitive, responding to tax cuts abroad with tax cuts at home and lifting the burden of regulation.
We shall slash taxes on saving and leave pensioners with more of their own money. We shall cut taxes for families, giving help to them when their children are youngest, and giving women more scope to choose how they balance their family and career. The Chancellor has broken his promise not to raise taxes. He has over-taxed the British people and hit hard those who can afford it least. People have seen no improvement in their public services and received almost nothing back in the Budget.
The Prime Minister once said that a high spend economy is not a high success economy. In that respect at least, time is proving him right. If Labour were returned at the election, we would see higher taxes, more stealth taxes and more crises in our hospitals, schools, transport and the police. Fortunately, there is a better way, and the Conservatives will lead the country along that better way.

Mr. Robert Sheldon: The right hon. Member for Kensington and Chelsea (Mr. Portillo) referred to productivity. I have found the document "Productivity in the 1JK: Progress towards a productive economy" most valuable. Its publication is an interesting aspect of the Budget, which I hope will be repeated. I intend to cover that document in detail.
Every Budget hay two maxims. One is that a Budget that looks good in the spring appears less favourable in July. The other is that before a general election, bribes must be delivered. Everyone can see that the Budget is consistent with my right hon. Friend the Chancellor of the Exchequer's aims as they have shown themselves for the past four years. It is a responsible Budget, which will continue to look good in the coming months and perhaps even longer.
My right hon. Friend has shown himself to be a successful long-term planner—we have not had such a person before in the post-war years. From Hugh Dalton to the right hon. and learned Member for Rushcliffe (Mr. Clarke), the consideration has essentially been to keep the show on the road. From the time of his appointment as Chancellor, however, my right hon. Friend began the task of planning for the whole of this Parliament. Right at the beginning of his term of office, he made the momentous decision to give interest rate policy to the Bank of England. That has worked beyond the expectations of many and has underpinned the stability that he sought to bring to public finances.
I have one comment to make on that aspect of policy. I do not want a wide range of interests to be represented on the Monetary Policy Committee, but it could do with


having one member who understands manufacturing and who could perhaps reflect a more regional outlook. Apart from that, the change in responsibility for interest rates has been a foundation of my right hon. Friend's success. In the past, the pressures on a Chancellor for decisions on interest rates have been constant—at times weekly, and even daily. As a consequence of removing that pressure, he has been able to devote his energies to economic reform and long-term plans.
Initiatives include the welfare-to-work programme, greater control of public expenditure, investing for the long term and—of great importance—my right hon. Friend's concern for productivity and the manufacturing industry. I should declare an interest in a small textile company. In the absence of any comments on that industry, I do not believe that it is necessary to inform the House of that, but the Standards and Privileges Committee considers it to be a grey area.
As I have already said, I especially welcome the document "Productivity in the UK", which was published with the Budget. Although our performance is lower than that in the United States, France and Germany, some factors are more encouraging. First, unemployment has fallen by 1 million under the Government. Although that means that many new employees are entering the work force with less in the way of sills and consequent productivity than those already employed—that is mentioned on page 11—with levels of unemployment much greater in France and Germany, any sharp reduction in their unemployment rates would be likely also to reduce their levels of productivity.
Secondly, I find it much harder to measure productivity in services than in manufacturing. For example, how do we measure productivity in retailing? Do we consider values sold per member of staff'? Should that take into account the kind of services on offer and the arrangements in place? What about cleaning services? There are other examples. Now that the service industry has grown so large and the number of people in manufacturing has fallen, the computation of general productivity is uncertain at best.
Thirdly, I believe that productivity is closely related to demand. It is when the pressures to produce are great that improved methods of working are devised. It is one aspect of necessity being the mother of invention. With a pound that is not as competitive as we should like, the demand effect of exports is not as high as I would hope. My right hon. Friend has produced his five economic tests for entry into the euro. I am strongly in favour of entry, but I would add a sixth test: we need to have a competitive exchange rate on entry.
The relationship between productivity and demand is important. Many years ago, I was the manager of a machine shop for the refrigeration company for which I worked. It had about 100 employees then. There was a problem with a machine doing the boring for compressor heads, which was a limitation on production. Because demand increased so much, all of the company's attention focused on that single machine and, eventually, we managed to raise production levels from eight to 20 compressors a day. That kind of pressure brings about such solutions. Productivity is related to demand, and I hope that demand will come from overseas in due course.
Finally, on that point, I take issue with box 2.3 on page 8 of "Productivity in the UK", which seems to suggest that gross domestic product per capita is the same as

productivity. Of course, GDP per capita is greater in London than in the regions. Wherever the more affluent live and work, the more they earn. To say that productivity is greater in the London area than in the regions is too simplistic. In London, people earn more and spend more on goods and services. The entire question of productivity is more complex than the explanation set out in the footnote to box 2.3.
The table on page 32 is encouraging; it represents a study by the Organisation for Economic Co-operation and Development showing that barriers to entrepreneurship are lower in Britain than in any other country. Britain beats the United States, which is in sixth place; Germany, which is in 16th place; and France, which is in 20th place. In terms of administrative burdens on start-ups, we rank third; for regulatory and administrative capacity, we rank first; and on barriers to competition, we rank fifth. The ranking on regulation and administrative burdens is particularly encouraging. Quite rightly, we draw attention to those barriers to entrepreneurship, only to find that we are so much better at removing them than others. That makes one wonder about the bureaucratic labyrinth devised by some countries.

Mr. Portillo: Hear, hear.

Mr. Radice: Although the shadow Chancellor says "Hear, hear," he spent most of his speech criticising the Government for putting administrative burdens on industry. The evidence that my right hon. Friend has read out demonstrates quite the reverse; we benefit and are in a good position.

Mr. Sheldon: There is no doubt about that. However, the position accords with our general understanding. One only has to go to some of those countries and see the bureaucratic nightmare involved in the simplest transaction to realise that, although there is much to be done in this country, we do a lot better than others.
On investment, at the micro level, I am a great believer in capital allowances for plant and machinery, and, of course, information technology equipment—even up to 100 per cent. I am very pleased indeed that the Chancellor of the Exchequer shares many of my concerns. As Chairman of the Public Accounts Commission, which looks after the operation of the National Audit Office, I had been a little uneasy about the NAO being given the task of verifying the assumptions and conventions underlying the fiscal projections of the Budget. That task was given to the NAO in the Finance Act 1998, so it has a responsibility for what is published in the important document, "Productivity in the UK".
We now have had experience of such reports, which show that the Treasury's assumptions and forecasts on important matters, which are given to the NAO, are reasonable. At first, there was a little anxiety about involving the NAO in that novel task, as there was concern that it should be a little distant from the Government. However, involving the NAO in that task imposes discipline, not on the present Chancellor—who does not need it—but on those who, from time to time, have strayed outside the areas of proper financial prudence. It would be an interesting exercise to work back and see if previous Chancellors could always claim the same kind of endorsement as that gained by the present holder of the office.
One great achievement of the Chancellor has been his welfare-to-work programme. With the establishment of the minimum wage, higher levels of employment are reducing the connection between poverty and low paid work. However, poverty and unemployment have still gone hand in hand, so we have the continuing drive to get people into work. The new deal programmes, the child care provisions, and the schemes set out in the "Budget 2001" document on page 71, under the heading "Easing the transition to work", all set out the way in which employment is the key to ending poverty.
I find all that impressive, but there is one issue that is not fully addressed in the Budget: the high cost of earning a living. Earning a living is an expensive business. It was not always so. In the days when the cotton industry was the mainstay of my constituency, women did not need any encouragement to work. We had one of the highest proportions of working women in the industrialised world.

Mr. John Hayes: I am grateful to the right hon. Gentleman for giving way. Does he find it equally impressive that according to Government figures, the number of registered child minders is falling? He expects people to move from welfare to work, but how does he expect them to find the necessary child care to allow them to do so?

Mr. Sheldon: In the Budget, the Chancellor has given encouragement to those very schemes.
In my constituency, the work was always there—just along the road or alleyway—and the cost of earning a living hardly existed. There were grandmothers and aunts to look after the children, transport costs did not arise, as people walked to work, and income tax was for the better-off only. Now we have the expense of travelling to work, the cost of eating away from home and the need to dress more suitably for work. All those large expenditures must be paid for from taxed income and they act as an disincentive.
Fundamental changes have been necessary for a long time. Ideally, one would wish the costs of transport to be tax deductible, but I know the problems associated with that. The child care provision is a recognition of some of those work-related expenditures. In London, of course, we have the London weighting allowance, but many of the Londoner's expenses are now being faced in other cities around the country, without any comparable allowance. I believe that more should be done to meet the Chancellor's objective of making work pay and reducing the barriers to full employment. These matters need to be considered further.
I come to a little hobby-horse of mine, concerning hypothecation. As anyone who has worked at the Treasury knows, one must always agree with the Treasury line on hypothecation. To earmark an expenditure is to lose the ability to decide on priorities. That is the argument against it, and it is compelling. Not only that, but the amount of tax collected may not accord with future expenditure plans. For some years, however, I have been pursuing a case for hypothecation—for earmarking some money from taxation for particular purposes. The one case which, to me, satisfies the rare condition that might justify its introduction is expenditure on the health service. I am glad that my right hon. Friend the Secretary of State for Health is present.
It is clear to me that the cost of the NHS will rise ever faster than the rate of inflation or even growth in the economy. That is because the population is ageing. As needs are met, health needs become a, or perhaps the, major area of increasing expenditure. The time is coming when we shall need to think more about private medicine. which I do not favour, or a special NHS tax.
Anyone who has served in the Treasury has a visceral feeling about hypothecation. The road fund licence still casts its shadow 70 years later. One important weakness of hypothecation is that it does not take account of changing patterns of priorities in expenditure, but, as I said, one certain aspect of the health service is that demand will increase into the indefinite future. People may be more willing to accept an NHS tax if they can see the consequences of that expenditure, whereas other taxes just disappear in the vast generality of public expenditure. The time has surely come to explore sensibly the possibility of introducing such a tax.
I welcome the decision to ensure free entry to museums—a matter that is dear to my heart. It is necessary to retain the enthusiasm shown in the millennium year, which was wonderful for our museums and galleries, and free entry should help to achieve that.
People such as me usually make a number of critical comments, but I believe that this Budget could be the best on which I have had the privilege of speaking in the House and I wish my right hon. Friend the Chancellor well.

Mr. Matthew Taylor: The Conservatives have placed throughout the country a series of posters telling people that they have paid for the taxes, but asking where the doctors, nurses and police officers are. The posters are correct in both respects, and an understanding of why they are correct—the way in which the Government have pursued their economic strategy in this Parliament, and so the fundamental weakness in the Conservative party's decision to place the call for tax cuts at the forefront of its campaign—is the key to understanding the Budget,
Taxes have been raised to cover a deficit that the Government inherited from the Conservatives: almost pound for pound, that is where the taxes have gone. It was money that the Conservative Government, including the shadow Chancellor, were spending but not receiving in income. As everybody knows, spending in excess of income means going bust sooner or later. That is precisely what happened over and over again when the Conservative party was in office.
Taxes have risen, but spending has not; indeed, under the current Government, it has been falling as a proportion of national wealth. That is why the Conservative party is in such a dilemma when it tries to offer any coherent explanation of where it will find the money for tax cuts, and why the current Government have been delivering less spending than the previous one.
The Budget illustrates that process well. As the Conservative shadow Chancellor pointed out, it delivers even lower spending than the Government planned only a year ago in their original spending plans. The Chancellor says that growth is rising from 3.4 per cent. to 3.7 per cent., but unfortunately that is typical sleight of hand. It is possible only because he has failed to spend money that


he previously announced. Such an approach is typical of the Government, who announce big spending figures that are not delivered, as we can see when we consider them in detail.
Indeed, our common sense tells us that they are not delivered. If we visit schools, we see that most children suffer from larger class sizes; if we wait for a hospital appointment, we suffer from longer waiting lists even to see a consultant; and when we wonder what has happened to the police, we realise that they are not there because their numbers have fallen. Again and again, the Government say that they are spending more, but although they might have planned to do so, they are not.

Mrs. Alice Mahon: Will the hon. Gentleman give way?

Mr. Taylor: I shall do so in a moment. By developing my argument a little more, I may help to answer the hon. Lady's question.
It is not just that the Government have failed to spend the money. Often, their claims on spending bear no relation to reality. Immediately after the Chancellor's statement, briefings were given by Government and Labour party representatives who said that the Budget balances the Government's priorities of cutting tax and investing in health and education. They said that it was so balanced that it meant £2 billion for health and education and £2 billion for tax cuts. When we stripped away the figures, we found that that meant £2 billion over three years on health and education, but more than £13 billion on tax cuts. In other wards, there is no such balance at all. In a mud-wrestling contest with the Conservative party, the Government are spending six times as much on cutting taxes than on health and education. That is why we do not see the police officers, the teachers, the doctors and the nurses.

Mrs. Mahon: I should like to invite the hon. Gentleman to my constituency, where we have a new hospital, an increase in police numbers and class sizes are going down. Money has been earmarked for a new secondary school and the other schools, which had fallen into disrepair over the previous 18 years, are looking pretty good. Why would my constituency be so different from the hon. Gentleman's?

Mr. Taylor: I do not know the hon. Lady's constituency as well as she does, but I know that the Government's own figures show that there are fewer police, that there are more children in larger classes and that waiting times to see a consultant have increased massively under this Government. The figures also show that Labour will fail to meet moss of the pledges that appeared on its general election pledge card.
People know what has been happening. The simple fact is that the Government will deliver lower spending, as a proportion of national wealth, than was delivered in 15 of the Conservatives 18 years in government. People see the results.

Mr. John Swinney: May I reinforce the hon. Gentleman's arguments by highlighting the fact that, according to parliamentary answers that I have seen, even at the end of the comprehensive spending review,

public expenditure in Scotland—despite all the much-vaunted largesse—will still not reach the proportion of national wealth that it had reached when the Conservatives left office? Does the hon. Gentleman agree with me on that point?

Mr. Taylor: I agree with the hon. Gentleman. Moreover, that is true across the whole country, not just in Scotland.
The Labour party has come up with a defence. My arguments, although they undermine the Conservative case, also go a long way towards undermining the Labour case. Labour's defence is, "Ah! Strip out the savings we have made on reduced unemployment and reduced national debt, and you will see that we have been able to reduce spending overall, and yet spend more where it matters in those areas of the public services." However, leaving aside social security and debt, the Government have still spent less over this Parliament on important public services such as health, education and pensions than the Conservatives did.
During most of this Parliament, total spending—leaving aside social security and debt payments—will have been lower than in any previous year for which we have comparable records, going back to 1955. People know that that is the case, because they know that, on the ground, they are not getting the doctors and nurses who could help to cut waiting lists, and they are not getting reductions in class sizes. That devastates the Conservative case, but it also shows that the Labour Government exaggerate their record.
We now come to another excuse. The Government say that spending by some Departments has gone down, but that they are making the investment where it matters, on their priorities of health, pensions and education. However, we now know the Government's record. The Budget delivers the definitive position on which Labour will now enter the general election—assuming, as we all do, that it will be called within the next couple of months, if not the next couple of weeks.
During this Parliament, the Government will have cut the share of national wealth going to education, the NHS and pensioners. That share will be lower than in the last year of the previous Conservative Government, even if calculated right to the end of this Parliament. Even after the end of three years of comprehensive spending review investment, Labour will still be spending less, as a proportion of national wealth—even if we believe the figures—than the previous Conservative Government on their No. 1 priority: "education, education, education". Spending has not been committed to that priority, and that is why there has been such a lack of delivery on the ground.
Labour Members know that there is a problem. They hear about it every day from the people who voted them in to deliver improvements in vital public services. The Conservative party, which has nothing to offer but cuts, also knows that there is a problem, because its advertisements all around the country ask, "Where are the doctors?", "Where are the nurses?", and "Where are the police officers?" Quite right too, so why are the Conservatives offering cuts? Indeed, why has the Chancellor prioritised cuts in his Budget?
The figures are appalling, even if we believe Labour's spending plans, which we should not, because year after year after year the Government failed to deliver even the


spending plans that they announced. It is unusual for any Government to fail to deliver their spending plans. Perhaps that is understandable on capital investment, which is not always easy to achieve, but to fail to deliver revenue spending is remarkable.
A major reason for that failure is the Government's squeeze on wages. In particular, they have squeezed the salaries and wages of police officers, teachers and health professionals, for whom increases are below private sector levels. The Government have allowed themselves to reach the stage at which they cannot even recruit staff to fill posts that they are funding, so bad is Labour's record.
The Government have a final excuse: it does not matter if the share of national wealth going to the NHS, schools and pensioners is going down because the economy is growing, which allows them, as the Conservative party argues, to cut taxes and deliver the improvements that are needed. Those improvements may not be made in line with growth in the economy as a whole and those sectors may get a lower share, but, they argue, they will get a share of a bigger cake that is therefore bigger in its own right. That, of course, assumes that there is no need for growth in the public sector to reflect growth in the wider economy. That can be delivered only by holding down incomes—most of all, those of pensioners.
There are more pensioners than ever before, but we deliver less money to them. That, of course, can be achieved only by giving them lower pensions. Which pensioners do least well out of the Government? It is the 500,000 who are entitled to the minimum income guarantee, but do not claim it because they cannot or because they will not lose their dignity to do so. They expected the pension to deliver them a decent income, but Labour has entirely neglected them.
The issue goes wider than the basic pension. Income for pensioners as a whole has fallen as a share of national wealth, which is why they have not shared in the benefits of the growth in the wider economy, despite the promise in Labour's election manifesto. That is true in health and education, too. In health, there is more technology and more people need care. We know that, simply to stand still, the health service needs funding growth that exceeds, let alone matches, growth in the wider economy. Under Labour, the share has fallen. If schools are to attract the staff they need, salaries must reflect growth in the wider economy.
Private sector salaries have risen by more than 15 per cent. under the Government, but the salaries of teachers, nurses and doctors have risen by just over 10 per cent. and those of police officers by only just over 6 per cent. They have all fallen steadily behind, but the Government act as though they are surprised that they cannot recruit people to work in those vital public services.
For years, doctors, nurses, teachers and police went into their professions even though they knew that they would be paid less than in the private sector. They believed in what they were doing, but there is a limit to how far people will go. We all meet teachers, doctors and nurses who are leaving their professions—qualified, but not practising; dedicated to the health service or to public education, but unable to afford to continue to work for them. We know that that is true because measure after measure announced today by the Secretary of State for

Health admitted the problem. He targeted small sums to try to buy people back when they really need a decent salary increase.
The real growth argument is entirely bogus. Any Government who cut the share that goes to those great services cut the great services themselves, as Labour pointed out over and over again in opposition. We have heard the line before from Baroness Thatcher. Her Government kept stating the figures—more money, more money—but the truth was that those services were falling behind those in the rest of the economy. This Government knew that then and, in their hearts, they know it now. Day by day, they hear abort it on the doorsteps and see it in schools and hospitals.

Mr. Rammell: I think that I heard the hon. Gentleman call for an across-the-board increase in teachers' pay. If that is the policy of the Liberal Democrats, why is it not costed in their alternative Budget?

Mr. Taylor: If the hon. Gentleman had bothered to look at our alternative Budget—I have my doubts about whether he did—he would have seen that our health proposals include a specific £600 million pledge of an average of £1,000 extra for every low-paid doctor, nurse and health professional in the NHS. Moreover, under our proposals trainee teachers would be paid for the first time. At present they come into the profession and work as teachers work, but without a proper salary.
So there it is: money for teachers, money for doctors, money for nurses and money for health professionals, funded according to our specific costed proposals.

Mr. Rammell: rose—

Mr. Taylor: The hon. Gentleman may not like this, but if he has asked a straight question and been given a straight answer it is pr3bably time for him to sit down and stop talking.

Mr. Rammell: On a point of order, Mr. Deputy Speaker. Is it in order, when I have asked a specific question about an across-the-board increase in teachers' pay, for the answer—

Mr. Deputy Speaker: Order. I think the hon. Gentleman has been here long enough to know a bogus point of order from a real one, and that point of order is bogus.

Mr. Taylor: Labour party loyalists do not find this an easy issue to address, because they know that on the ground spending has gone down, waiting lists have lengthened, class size; have increased and police numbers have fallen. I realise that it is difficult to reconcile that with the Chancellor's propaganda, but it is easy enough to work out how truthful he has been according to the number of years that he lumps together in his spending plans.
Last year, when the Chancellor was making some real spending increases in the comprehensive spending review, he gave us the figures for one year. This year—the bogus year—when he wanted to pretend to his Back Benchers that he was doing something to meet their concerns while actually trying to deal with Conservative attacks about


taxes by making tax cuts that were much larger than any spending increases that he planned, he lumped three years together.
Back in 1998, when the Government were undershooting Conservative spending plans that the last Chancellor described as eye-wateringly tight and would never have met himself in any case, the Chancellor not only lumped three years together but bunged in inflation, multiplied it several times and hoped that no one would notice. People did notice, of course, because down on the ground things were getting worse.
That is the history of this Parliament. Labour cannot go into the next election simply on the basis of promising jam tomorrow; it has been in office for four years, and it must explain its record. Its record is this: less of our national wealth has gone to pensioners, which is why they received just 75p last year; less of our national wealth has gone to the health service, which is why waiting lists are at record levels; and less of our national wealth has gone to schools, which is why most pupils are in larger classes than ever, and why students are having to pay tuition fees—the tax on learning.
We know that the Government understand that really, whatever the spin and whatever the ability to churn out headlines on Budget day. We know that they know because, when we cut through the nonsense, the real figures are there in the Red Book. The real figures were there when the Chief Secretary was challenged on "Newsnight". There he was, talking about all the extra money for health and boiling it down to
a small, but welcome, addition to the health budget".
Jeremy Paxman asked,
what percentage is that of the health budget?
The Chief Secretary replied:
It is of course a small but welcome addition".
Jeremy Paxman suggested that it was
about half of one per cent.
The Chief Secretary responded:
As I said, a small but welcome addition".
The truth is that it is a tiny amount—less than half of 1 per cent. It is less than 50p for every £100 already spent on the health service.
This was not a Budget for health and education; it was a wrestling match with the Conservatives, in an attempt to outbid them on tax cuts. It contained more than six times as much in tax cuts as would be invested in public spending, at a time when the public are crying out for teachers, doctors, nurses and police officers whom they had thought that Labour would deliver.
Labour seems to believe opinion pollsters and pundits who argue that people who say they will support increased spending secretly want tax cuts. Accordingly, Labour says that it will deliver public spending, and secretly sticks the money in voters' back pockets.
The Government want to ensure that, come April, everyone feels a little better off. They want to salve their conscience on spending, yet to tackle the Tory party by outbidding it in tax cuts. We have two parties that want to deliver stealth cuts in services. They are not seeking to fulfil the electorate's demand for proper funding for the NHS, pensions, police and schools.
At the next general election, only one party, the Liberal Democrats, will be going to the electorate offering genuine and substantial improvement and investment in

those public services—to guarantee lower class sizes, shorter waiting lists, more police on the beat, and, at last, a decent deal for pensioners who fought for this country and were told that they would have a state pension in old age on which they could rely, but which has been torn away from them by successive Conservative and Labour Governments.

Mr. Giles Radice: We have just heard a very eloquent speech from the Liberal Democrat spokesman, the hon. Member for Truro and St. Austell (Mr. Taylor). However, there were two problems with his speech. First, although it is true that there were two tight spending years under this Government—I am on the Treasury Committee and we examine the spending issue every year—Liberal Democrat Members will have to say what they would have done in the same circumstances. They have never answered that question.

Mr. Taylor: Will the right hon. Gentleman give way?

Mr. Radice: No, I should like to finish my point.
Secondly, public spending is now increasing faster than growth, as has been pointed out by the Institute for Fiscal Studies and by various other bodies. Specifically, considerable extra resources are being provided for education and health. As I understand it, that spending is having an impact even in Cornwall, where there are more nurses now than there were in 1997—

Mr. Ben Bradshaw: There are 200 more nurses.

Mr. Radice: Yes. I believe that police numbers in Cornwall also are higher now than they were in 1997.
I did not hear any facts in the speech by the hon. Member for Truro and St. Austell, but I heard many promises. Although I realise that we are in a pre-election phase, I should like to stand back a little and consider the issues if the hon. Gentleman does not mind. This is the Chancellor's fifth Budget, and it provides us with a good perspective from which to consider his policies and measures. If the general election is in May, as the hon. Gentleman seemed to be suggesting, this may be my last speech—certainly my last economic speech—in the House.
I read history at Oxford, although later I learned some economics at the London school of economics. I think most of my economics has been picked up in my 40 years of Chancellor-watching-28 of them spent as an hon. Member, including 14 on the Treasury Committee, four of them as its Chairman.
A long time ago, when I was young, I believed that the first objective of economic policy was to speed up the rate of economic growth, and that that could be achieved by promoting a higher level of demand. I was an enthusiastic supporter of the Wilson Government's national plan—which perhaps only a few of us remember. I used to think that the plan failed because of the decision not to devalue. Although I still think that that was a mistake, I am now highly sceptical about whether it is possible, other than in the very short term, for Governments to promote growth by boosting demand. The failure of the Maudling and Barber dash for growth was therefore inevitable.
The Lawson chancellorship had its moments. However, in 1987–88, when he allowed the economy to overheat, the consequences were almost inevitable: the brakes were slammed on and there was what the then Governor of the Bank of England described as a "domestically generated" recession.
It was the Lawson experience, above all, that convinced me that the prime objective of policy should be monetary and fiscal stability. I believe that economic growth can be achieved and that businesses can prosper and grow only against such a background of stability. That is why, in the latter 1980s and in the 1990s, a little before it became fashionable in the Labour party, I supported the idea of disciplined fiscal policy, with monetary policy controlled by the Bank of England.
In my typically non-partisan way, I am prepared to acknowledge that the former Chancellor, the right hon. and learned Member for Rushcliffe (Mr. Clarke), made a contribution. He began the process of cutting the very large deficits bequeathed by the Chancellors who preceded him. He also published the minutes of the meetings he held with the Governor of the Bank of England to decide on interest rates. That was a movement forward, although the right hon. and learned Gentleman spoiled his record before the 1997 election with a bit of a pre-election spending spree. He also cut interest rates in the run-up to the election, as he should not have done.

Mr. Bradshaw: He should have put them up.

Mr. Radice: He should have done that, yes. In fact, that is exactly what happened immediately after the election.
However, it is the present Chancellor who has had the boldness to carry through the revolution in monetary and fiscal policy needed to achieve stability. He gave operational independence in monetary policy to the Bank of England, and set up the Monetary Policy Committee.
My right hon. Friend the Chancellor has also introduced fiscal rules. The golden rule states that borrowing should not finance current expenditure but investment only, while the sustainable debt rule holds that public sector debt should be kept at a stable and prudent level. That level was originally thought to be 40 per cent. of gross domestic product, but it is now much lower.
Earlier, I challenged the shadow Chancellor from a sedentary position about his fiscal rules, and he said that he would give them to me later. He has not done so because he does not have any. The shadow Chancellor criticises my right hon. Friend the Chancellor for his golden rule, but he has no rules at all of his own. That is a weakness in his argument.
There is no doubt that the two innovations introduced at the beginning of this Parliament have produced impressive economic results, which my right hon. Friend was able to announce in his Budget—the lowest inflation for 30 years, the lowest long-term interest rates for 35 years, and the lowest unemployment since 1975.

Mr. St. Aubyn: The right hon. Gentleman says that the Opposition have no rules, but has he not noticed that we have a spending rule? We will increase spending in line with what the economy can afford. That rule means

something, unlike the Chancellor's borrowing rules which, as my right hon. Friend the shadow Chancellor said, have no bite at all.

Mr. Radice: I hope that the hon. Gentleman does not mind my saying so. but that was a pretty feeble intervention. All Governments and Chancellors hope to increase spending in line with what the economy can afford. The question is whether the rules governing a Chancellor's actions are sharp enough to enable that to happen. I believe that this Government's rules are sharp enough for that.

Mr. St. Aubyn: Surely there is all the difference in the world between saying that spending will be increased in line with growth in the economy, and increasing spending above the economy's sustainable growth rate. The latter is what the Chancellor proposes to do, and in the long run it will not be sustainable without massively higher taxes.

Mr. Radice: The Government had a two-year period in which they stuck to the Conservative spending targets. Even the previous Chancellor of the Exchequer, the right hon. and learned Member for Rushcliffe, said that those targets were merely illustrative and that he would not have implemented them. In that period, public spending was massively below growth in the economy. We are now moving into a period when it is above growth in the economy. The level evens out over a period. I am sure that the Government will want to have public spending in line with the growth in the economy over a period of, say, 10 years. That would be sensible. In any case, the Government's golden rule and sustainable debt rule will ensure that, even if spending does rise above economic growth, the necessary discipline will be in place.
In addition, stability has produced steady economic growth—of 3.5 per cent. in 1997, 2.6 per cent. in 1998, 2.3 per cent. in 1999. and 3 per cent. in 2000. The forecast is for growth of 2.25 to 2.75 per cent. in 2001. In other words, throughout this period, the economy has been growing close to trend. I admit that it was growing under the previous Chancellor as well, so we have had a long period of economic growth which has been extremely good for this country. It has helped to create room for substantial increases in education and health spending—contrary to what the hon. Member for Truro and St. Austell implied, without quoting any figures. I would like to have him before the Treasury Committee—we would soon take him apart. We have also made a sustained attack on child poverty. All that has been done without putting the public finances at risk.
The announcements in the Budget and the measures previously announced by the Chancellor amount to a 1 per cent. stimulus. We have to ask: how risky is it and will it stoke up inflation? The Treasury Committee put those questions to expert witnesses this morning. It is true that some of them world have preferred less stimulus, but none thought that this was particularly imprudent. Indeed, there was a sub-text: they thought that it was quite surprising that the Budget was so restrained in the run-up to an election.
The experts are right to say that such a stimulus is not imprudent because the background is one of very low inflation, below the target. We are still running substantial budget surpluses and we face the possibility of a United States downturn. It may be necessary to have some


stimulus to the economy. A 1 per cent. stimulus, which is not very substantial, could well provide that in the coming year.
There is general agreement that there is little point in running budget surpluses indefinitely. It makes sense, therefore, to spend above trend for a period and then run small deficits by the end of the forecast period, provided that those deficits support public investment and not current spending, and that they are affordable in terms of public debt. I note that the public debt is now down to 30 per cent. of gross domestic product.
The hon. Member for Truro and St. Austell made the point that the Treasury has consistently underestimated its surpluses. That is partly because its assumptions, particularly of growth, are extremely cautious and conservative. That gives the Treasury a strong position because there is always a margin of error. That is why the Chancellor has been able to announce some of these increases.
To sum up, in the Government's fourth year, the Chancellor is in an enviable position. If any Conservative Members doubt that, they should consider how much they would like to have a Chancellor who is about to face the voters with the lowest inflation for 30 years, steady economic growth—I quoted the figures—and the lowest unemployment figures since 1975, as well as rising investment in health and education. That is not a bad position to be in, and if Conservative Members were honest they would agree.
Of course there are no miracles, and certainly no economic miracles. There is no doubt that despite what the Government are doing with regard to productivity, we have a long way to go before we catch up with the United States, Germany and even France. Under this Government, many extra people have been taken back into work. Such people are, by definition, likely to be less productive in the short term than other workers, so the slowing of productivity growth is not surprising. Most experts expect an increase in the years ahead, and so do I.
There are no economic miracles, and although the Government have created the conditions for stability, I am able to announce this afternoon that the economic cycle has not been abolished: there are still risks on the inflationary side, and especially on the recessionary side.
Critics say, of course, that the Chancellor has been lucky, in that on the whole—excepting the late part of 1998—economic conditions have been relatively benign. It may be true that he has been lucky, but he has also made his own luck. It was his decision to give the Bank of England independence and to stick by his predecessor's spending plans for the first two years. It was also his decision to keep to the fiscal rules that he had devised. His courage has yielded the results that I mentioned.
The Chancellor's boldness of conception and his determination in implementation have put the United Kingdom economy in a strong position to continue on its path of stability and to take advantage of opportunities that may arise—including, if I may say so so late in my speech, entry into the euro. I salute him for his achievement and I wish him and the Government well in the coming months and years.

Mr. Kenneth Clarke: I follow the precedent of other hon. Members by reminding the House of my declaration of business interests in the Register of Members' Interests.
I am delighted to follow—not for the first time in a Budget debate—the right hon. Members for North Durham (Mr. Radice) and for Ashton-under-Lyne (Mr. Sheldon). I say with some sorrow that it is probably the last time that I shall follow either of them in such a debate as they both propose not to stand for the next Parliament. I propose to throw myself at the mercy of the electors of Rushcliffe once more. If they do me the honour of returning me to this House, I shall miss the contribution of the two right hon. Gentlemen and the chance to debate with them. Neither of them are Blair's babes and they do not use the sillier slogans to describe economic policy to which we have become accustomed in the House. Also, they do not use too many of the extremely dodgy figures that the Chancellor is inclined to produce for the House. Alas, we will no doubt have a touch more orthodoxy in the next Parliament from those who defend the Government's record.
I cannot get very excited about the Chancellor's fifth Budget. In the overall context of macro-economic management, it is not very important. He did not do a great deal and it is not of huge significance for the coming election either. He took his last important decisions in the so-called pre-Budget judgments last autumn, when he set us on the course of a massive proposed increase in public spending in the next three or four years
I suppose that I should be grateful that the Chancellor did not get carried away. I, too, faced the pressures—I had to deal with a pre-election Budget and some people felt that I ought to do something spectacular to win the election. Various previous Chancellors faced the same problem. This Chancellor would have made matters far worse for his successor had he given in to that sort of pressure and made the problem even worse by making serious tax cuts or spending increases on top of those he has already made.
I wish that the Chancellor would not keep on saying that Tory predecessors did not show such restraint. It is 50 years since we had a pre-election Budget that showed the slightest irresponsibility, and I doubt whether we will see one again. Today's electorate are too sophisticated to be bribed with their own money a few weeks before a general election. This electorate know that the present Chancellor has been a tax-increasing Chancellor on a substantial scale. The fact that he will not admit that the burden of tax has risen under his chancellorship is a blemish on his presentation of policy, but he will have to go into the next election as someone who has raised taxes.
On the details of the Budget and the micro-economics of the tax and other changes, the Chancellor has continued, in a not very spectacular way, his overriding policy of mild redistribution of income by stealth without being very clear about it. I am glad to say that he has continued the policy of welfare to work, which he inherited from the previous Government: it was not only a slogan but a policy direction, too. I welcome the family element of the policy, whose effects are beneficial.
The Chancellor has persisted in his attempts to combine the tax and benefits systems, developing ever more tax credits. I admit that I was attracted by the idea of combining those systems. One has to go back to a Government of 30 years ago to discover Conservative Chancellors toying with the idea of a tax credit system.
The difficulty is that the present Chancellor has embarked on that course without solving most of the big


problems that put us off it. In particular, he is introducing a system of bewildering complexity. That gives rise to two large problems.
First, the system is so complex that the electors do not understand it—that is why the Budget has little electoral appeal. More important, many of the people who should be claiming the benefit of those tax credits will not actually do so.
The second problem is the worst; it is one that most of us foresaw when the Chancellor embarked on the working families tax credit. The system is appallingly complex for the employer. It is one of the worst burdens imposed by the Government on those responsible for small business. That burden gets worse and worse as he further complicates the system. It is a pity that he proceeds with it.
I continue to suspect that the Chancellor likes to plunge further into tax credits because they help him and his Chief Secretary to present the figures in the slightly bewildering way that they use in the Red Book. To keep down the tax burden as presented to the general public, tax credits are still treated as though they were tax reductions when they merely transfer payments that should emerge as benefits. They should be accounted for more clearly. The Chancellor has not solved the problem that, as soon as one uses the Inland Revenue to make such transfer payments, it produces complication, cost and a great propensity for evasion and misuse.
I should have liked to see the proposals on taxation and savings made by my right hon. Friend the Member for Kensington and Chelsea (Mr. Portillo) adopted in the Budget. I wondered whether the Chancellor would have had the wit to steal that extremely good pre-election idea from my right hon. Friend; it is a sensible way to encourage saving by people of modest means. We need to get the savings ratio up.
I regret the fact that the Chancellor has not tackled the problem of annuities for those who have made provision for their own retirement. That must be tackled, but he has done nothing. He should also have had the political courage—there are no votes in the matter—to raise the starting threshold for the 40 per cent. higher rate of tax. During the Labour Government's period of office, 700,000 more people have become higher-rate taxpayers, by a process of pure drift. I agree that that was also happening under the Conservative Government, but it is now out of hand. There is nothing wrong with a 40 per cent. tax rate for people on high incomes, but people of above average yet perfectly ordinary incomes now have a 40 per cent. marginal tax rate. That should not be allowed to continue.
I shall not go further into the detailed provisions, but I regret that the Chancellor felt forced to go back to widening the l0p income tax band—to trivial effect for most taxpayers. The 10p band was a mistake; we do not need three bands of income tax. The 10p band was a silly political promise made before the previous general election. It is a pity not only that the Chancellor stuck to it, but that he has started widening it.
The Budget is not of great consequence. It is the least interesting of the five produced by the Chancellor. Perhaps he is running out of steam—who knows? He may he preparing to leave office—perhaps for the Opposition

Benches or perhaps for another Cabinet post. However, it looks as though his time at the Treasury may be coming to an end.
I now turn to the consequences of the Budget for economic performance. The background is that the Government say that the country's economic performance has been good, as indeed it has. However, that has nothing to do with the Chancellor: I shall return to that point in a moment. The Chancellor's management of the balance between tax and spending has been positively eccentric. There is no consistency.
The hon. Member for Truro and St. Austell (Mr. Taylor) rightly pointed out that the first three years of the Parliament were years of rigour beyond anything we expected. At the previous general election, as a Conservative, I tried to alarm the public about the forthcoming risk of a Labour Government by talking about the black hole in their finances. That black hole vanished because they raised taxes at a rate about which they had warned no one. They squeezed spending to an extent that no Government—even those led by Mrs. Thatcher—had ever achieved. That is how they filled the black hole during the first two or three years.
The Government began with a stringent iron Chancellor period; they go out with promises of fat years to come. Were they to win the general election, the next Parliament would, apparently, be handled quite differently, with a hugely expansive approach to public spending during the first two or three years. Perhaps, if the right hon. Member for North Durham is right and the Government find that they cannot afford that, they will have to make cuts before a general election. However, if they are returned and continue to follow this strange pattern and get into difficulty, it is mole likely that they will be taxing but trying to deny it.
This rollercoaster is unwise and unnecessary. Too often in the past, the public services have had the painful experience of thin years followed by fat years, although never on the present scale. It is unnecessary, because the Government took over healthy public finances. At the opening of the debate, the Secretary of State for Health was talking nonsense when he referred to public finances and debt spiralling out of control. Debt was on a sharp downward path.
My figures contained a mistake that benefited my successor: we underestimated the revenues that came in. We gave the present Chancellor economic growth, with buoyant revenues. We gave him the particular gift of self-assessment of income tax, which produced tax revenues on a scale that we had underestimated. The public finances were perfectly healthy.
I do not know why the Chancellor felt it necessary to go in for the undesirable taxes that this Budget has not reversed—taxes on pension funds and on business. He continued to add to them, even though he was well on the way to the balanced Budget to which he had committed himself. Sometimes, I think that it was because he wanted to create a good reputation in the City; he thought that there might be alarm in the financial markets that a Labour Government would be soft, so he had to be a tough iron Chancellor.
The Government were somewhat consumed by the record of previous Labour Governments, who had spent like mad during the first half of a Parliament and been in a mess during the second half. Perhaps the Prime Minister


and the Chancellor were over-impressed by the experience of Harold Wilson and Jim Callaghan. Perhaps the Liberals were right and the Government had a war-chest theory—"Let's screw things down now arid spend like mad in the run-up to the election."
I suspect, however, that it was all a bit of an accident. The Government found that they had been tighter than they had intended. The Prime Minister panicked and after Lord Winston complained, we found that billions were on offer. There was a sudden splurge of public spending in the run-up to the general election, to avoid upsetting the Labour movement. But that is no way to run the country's finances.
That is what happened; it is irrefutable. However, I object to the constant telling of the myth that the reason the Government were so tight at first was that they stuck to Tory figures. I know that Blair's; babes produce such slogans like mad, but they seem to overlook the Government's remarkable decision, which astonished me at the time, to cancel the annual public spending rounds, in which every previous Conservative Government had engaged. Green as the Labour Government were, I cannot understand how the then Secretary of State for Health and the Secretary of State for Education and Employment could have agreed to that. Their Departments must have been in despair. All over Whitehall, people preparing for the spending round were in grief when that decision was inflicted on them. Those were not Tory figures; to hold down spending was a mad gesture.
The hon. Member for Truro and St. Austell is right; the results were spectacular. I regret that during my last year in office total managed expenditure was 41.2 per cent. of gross domestic product; I was trying to get it down below 40 per cent. That was the rule that I was aiming for. By 1999–2000, we were down to 37.7 per cent. of GDP. Public spending as a proportion of GDP was taken by this Chancellor and this Government to its lowest level since the 1960s. As the Liberals acknowledge, the Conservative posters are right. That is the history of, "You paid the taxes and you didn't get the services".
We are now faced with promises that goodies are to come. It is said that the good to come can be afforded because the economy is in such a sound state. It is indeed reasonably sound. Starting in 1992, we have experienced nine years of growth, with low inflation and rising employment. That has a cumulative effect—the country feels good and feels wealthier—so we have been able to survive some of the strange vagaries of Labour management during the past four years.
The reason is that the right hon. Gentleman has been an extremely lucky Chancellor. First, he took over a very good inheritance. He has also had the particular luck to be Chancellor, so far, through four years of the most remarkable growth in the western economy since the war. I have been quoted various times about the things that I would give my eye-teeth for. All those who hoped to be Chancellor would have given their eye-teeth to be Chancellor of the Exchequer in the past four years. The right hon. Gentleman has not faced a problem. He took over a good inheritance and, thanks to Uncle Sam going through the boom period of a classic boom-and-bust phase, the world economy has grown and grown and grown.
My right hon. Friend the shadow Chancellor is right that the public are complacent about this. I was glad that he pointed out that our economic performance compared

with that of the developed world has been rather lacklustre—second rate, actually. The British are pleased with second best again. We have not been doing as well as our competitors.
Of course our growth has been miles behind that of the United States, but everyone in the developed world has been enjoying growth with low inflation and rising employment. Our growth performance is below the eurozone average—below that of Ireland, the Netherlands, and France. They are already wealthier than Britain in GDP per head. The relationship of our productivity to theirs has been worsening over the past three or four years and we have not been performing well.
Before the Labour party took over, we were the fastest-growing major economy in western Europe. Why have we not been performing as well as we were? One reason has been the mistakes made by the Bank of England.
I applaud the giving of independence to the Bank of England, but I feel free to criticise the performance of the Monetary Policy Committee. I have been on the doveish side of that divided Committee throughout, and I believe that the doveish side was right. It is not the case that we have been facing higher inflationary pressures than the rest of Europe. It was a mistake when people judged that we were. No one has had inflationary pressure over the last three or four years, but our Bank gave us the highest short-term interest rates in the developed world for most of the period of the present Government. Obviously, that slowed down our growth.
The other reason is that the Government have damaged our growth—I shall not repeat the arguments of my right hon. Friend the shadow Chancellor—by adding tax and red tape on business and adding labour market regulation of a kind from which we were previously free. While the western Europeans are lectured by the Chancellor about moving to more liberal labour markets and lower burdens on business, we are narrowing the benefit of our advantage over the rest of western Europe by going in the other direction.
That luck may be coming to an end. It is no good just carrying on with the somewhat happy but chancy approach that the Chancellor has proposed. The global economy cannot carry on growing for ever. We have not solved economic cycles in free-market economics, and the United States economy is at last slowing down—and slowing down remarkably rapidly—as most European commentators have been forecasting for the past three years.
Most people involved in Wall street say that the slowdown is temporary and will soon flatten out; they say that it will be V-shaped and that the trend will go up again. Most people involved in the real economy in America are very worried. They find that consumer demand is dropping like mad, and given that the bottom has dropped out of Wall street in the last two days, once consumer confidence goes in America, there could be a very sharp downturn indeed.
I do not think that the downturn will be a disaster. A slowdown in the American economy was probably overdue. The Americans have in fact gone through boom and bust. Their economy was held up as a model by some people in this country over the last three years, as opposed to that of the lacklustre, over-interventionist socialist Europeans. But the United States has got it slightly wrong now.
The Chancellor, having entered his days of being more generous to the public services, is counting on continued growth in the British economy. He supposes that the economic cycle does not affect him here. He supposes that it will be rather as before. He forecasts 2¼ per cent. to 2¾ per cent. growth for this year. That may be right, but I would not bank on it. We will be affected by any global slowdown.

Ms Claire Ward: Will the right hon. and learned Gentleman give way?

Mr. Clarke: Just a second.
Such growth as we get from now on will be driven by the public sector—by public consumption. It will be driven by the big increase in Government expenditure. If there is any slowdown, there must be some corresponding cuts in private consumption and private sector activity to make room for it, and that is not a healthy background against which to face the real issue, from which the Government keep running away. Given that their policy now is a massive increase in public spending, what will happen if the growth upon which it is wholly dependent does not materialise over the next three years?
As they do when we discuss so many other things, the Government just dumb down the argument. We raise this fear, and we are told, "Oh, they are talking about cuts, cuts, cuts." Big scissors appear, with fictitious figures for what we are supposedly saying that we would cut, just because we are raising the question. What if the economy cannot afford it between now and 2004? We are told that it means going back to boom and bust. I cannot for the life of me see how our proposals have anything to do with boom and bust.
I have already said that I do not believe that the Chancellor has given us any stability or predictability in his economic performance. A lot of things could go wrong, not only the slowdown in the economy. If the economy slows down at all, the Treasury's estimates of revenue are likely to prove overestimates. History shows that the Treasury tends always to underestimate its revenues when the economy is going up. That is why, every year, the Chancellor comes along with billions more than he expected to have. History also shows that when the economy suddenly goes down, the Treasury always overestimates the revenues that it has coming in.
Labour Members would be wise to recall what happened under Nigel Lawson, in 1988—it is a great pity that they pretend that nothing happened after 1988, and that the only Conservative record that they contrast themselves with is that of 13 years ago. What they discovered then, as we discovered then, is that the big numbers change very rapidly indeed.
On their own plans and estimates of growth, the Government already predict a deficit three years out. That deficit could be very large and unsupportable. I have no time to go into all the other things that are becoming unsupportable, such as the huge current account deficit that they are running as long as the pound remains overvalued.
When we talk about restraining growth in spending, it is no good rejecting our criticisms by saying that it simply means that we intend to cut public spending. It is also no

good rejecting criticism from the International Monetary Fund. I introduced openness in respect of producing IMF reports. The IMF points out that the golden rule is a slightly dodgy approach, and the Government dismiss it.
The fact that the European Commission's doubts about all this are rejected may be more popular among Conservative Members, but the Commissioner, Pedro Solbes, was an extremely good Minister of Finance in Spain and he had his head screwed on the right way. Despite that, he is wrong, apparently, when he raises queries about all this. He was a socialist; he was not when he was appointed, but he joined the PSOE just as it was defeated. The other Finance Ministers also have doubts.
The golden rule is not a golden rule at all The golden rule allows borrowing for investment only, but, as has been pointed out, it all depends what is meant by investment—and as far as I can see, any form of public expenditure known to man can be described as investment by the present Government. Unfortunately, like all other public expenditure, it must be paid for eventually. The criticism is rejected as though that were not true.
The previous Government did have rules. A balanced Budget over the cycle was our rule. We set an inflation target. My predecessor, Norman Lamont, set an inflation target of 2½ per cent. We were aiming to keep spending down below 40 per cent. of gross domestic product. We introduced rule-based economic management; this Chancellor replaced it with dodgy rules, such as the golden rule, which is infinitely flexible, and he altered the definition of half the public expenditure figures that we now have to try to stop people following what was happening. Therefore he should not reduce the queries about his spending to a silly level of argument to prepare for the election. The figures are there before us.
According to the Government, we need not worry, whatever happens bell weep now and 2004, if departmental estimates go up by 8.4 per cent.—6 per cent. in real terms—each year, come what may, to April 2004. They get the total spending down by making some dubious assumptions about cutting social security expenditure, but even so, total spending is anticipated to be 3 per cent. per annum overall above the trend growth of the economy. If the world economy slows down, it will be well above the likely growth of our economy, and it is difficult to see how it can be afforded. That is our valid argument.
My right hon. Friend the Member for Kensington and Chelsea addresses that valid argument, and it is foolish for Labour Members to reject it, not least because if they were to win the election their biggest nightmare would be how to get out of that obligation, having told everyone that anything else involves great cuts. Fortunately, the expenditure is not on health and education—we can match that spending—but the Government will not return to their current position in respect of GDP for some considerable time. The Home Office and transport are the big beneficiaries of this year's largesse. Lots of bus lanes, cycle paths and tramways in cities throughout the country are promised, but expenditure of every kind can be found across Whitehall.
If the Government are re-elected, we warn that they will raise taxes or abandon their plans, which are not supportable if economic growth falls back to trend or below. Theirs is an extraordinary approach, and that is the note on which the Chancellor will go out. I hope that he


goes by handing over to a Conservative successor, but if the Prime Minister has his way, I suspect that he will hand over to a Labour successor—if the Prime Minister can win the election and get himself back in for a second term. The Chancellor had an excellent inheritance when he took office. It is my opinion that he will hand over a much dodgier and poorer inheritance to whoever has the opportunity to take over, which I trust will be my right hon. Friend the Member for Kensington and Chelsea.

Mr. John Home Robertson: It seems likely that this will be my last speech in the House of Commons, so I hope that you, Mr Deputy Speaker, and the House will be tolerant.
It is a special pleasure to follow the right hon. and learned Member for Rushcliffe (Mr. Clarke), partly because many of us are looking forward to campaigning shoulder to shoulder with him for a yes vote for British participation in the single European currency in the not-so-distant future. I am afraid that his declaration of undying support for the shadow Chancellor was not altogether convincing. I suspect that, like the right hon. Members for Henley (Mr. Heseltine) and for Old Bexley and Sidcup (Sir E. Heath), he is deeply unhappy and worried about the direction that the Conservative party is taking.
As I recall some of the awful Budgets that I have heard proposed by forgettable Chancellors like Nigel Lawson and Norman Lamont, I take great satisfaction in registering my support for a Budget that cuts the burden on taxpayers while increasing provision for families, education, the NHS and other services.
The Chancellor of the Exchequer, my right hon. Friend the Member for Dunfermline, East (Mr. Brown), is the ultimate canny Scot, and he has demonstrated conclusively that prudence pays. This is not a giveaway Budget for an election; it is a business-like Budget for businesses, a friendly Budget for families and a constructive Budget for communities.
Last weekend, I spent a minute or two looking at my notes for my maiden speech, which I made on 9 November 1978 in the debate on the Queen's Speech. Much has changed in the past 22 years. When I was first elected, my constituency's economy depended largely on the National Coal Board and the farming industry, whereas now the biggest employers in East Lothian are based on science, services and nuclear power. In my maiden speech, I supported Denis Healey's valiant efforts to control inflation in very difficult times. I referred to the fact that the right hon. Member for Old Bexley and Sidcup was unhappy about what was happening to the Tory party—so some things do not change However, there is absolutely no risk of inflation with the present Chancellor.
Communities in my constituency suffered cruelly during the Tory years from 1979 to 1997. That might account for the fact that the Labour majority in my constituency increased from 1,673 in 1979 to 14,221 in 1997. Indeed, I find myself worrying about what is happening to the Tory party in Scotland. I never thought that I would have such anxieties, but it is not that long ago since the right hon. Member for Devizes (Mr. Ancram) represented my constituency as a Tory Member. At the Scottish Parliament election in 1999, the Tory candidate came third.
One of the reasons why the Tory party has been rejected is that local unemployment statistics ran into thousands during those years. With this Chancellor, unemployment in the county of East Lothian has fallen by 55 per cent. since 1997, to just 897 people, as more and more opportunities are created and as people build up their skills. Happily, we can take pride in the fact that everyone is protected by the new statutory minimum wage.
We are getting a lot of public investment, too. Thanks to the success of the Chancellor's strategy, our neighbourhood has new hospitals—either under construction, or planned shortly—improvements to schools and, at last, the commitment of £32 million to dual the Al from Haddington to Dunbar. I sincerely hope that that road project will not have to be delayed by a public inquiry into a small number of outstanding objections.
The Budget will increase the resources provided to the Scottish Executive by £200 million. I must advise the Opposition that there is no evidence of support for the shadow Chancellor's plan to cut public expenditure in each and every constituency by £24 million or so.
I am grateful to my constituents for electing me to the House six times. I have done my best for them through some difficult times, but, happily, unlike some of the hon. Members who are leaving the House, I shall have the privilege of continuing to represent my constituents for some time yet as their Member of the new Scottish Parliament, which has responsibility for Scottish legislation and the functions of the Scottish Executive. After the long struggle to achieve devolution, I want to do my little bit to make it work. We all know that that will take time; we are going through some difficult times, but it is an experiment that can work, and we are determined to ensure that it does so.
I shall miss a lot of good friends in the House, but, with respect, Mr. Deputy Speaker, I shall not miss some of the Ways and Means and procedures of the Palace of Westminster. We saw some of them in action last night, with three votes after 2 am. There is a lot to be said for the timetabled debates and electronic voting—if it can be made to work reliably—that we have in the Scottish Parliament.
I want to make two quick points about the Scottish Parliament, which is now responsible for Scotland's devolved share of the Budget. First, it is a completely new Parliament, with new procedures, elected by a new electoral system. We should not, therefore, be surprised by what occurs in those circumstances, such as last Thursday's vote on subsidies for the fishing industry. As someone who has been committed to the principle of a Scottish Parliament for a long time, I say with feeling that the Scottish Executive cannot be allowed to sidestep its accountability to the Parliament. However, the Parliament has an obligation to make coherent decisions. I trust that the Parliament will now have a proper opportunity to make a clear choice between a quick fix and long-term sustainability for fisheries with, I hope, all Labour Members of the Scottish Parliament present and with our Liberal Democrat partners focused on the responsibilities of government. That may be a forlorn hope, but we never know.
Secondly, I must emphasise the crucial importance of mutual understanding and confidence between Westminster and Holyrood to the integrity of the United


Kingdom. The overwhelming majority of Scots and their MSPs—with the possible exception of the hon. Member for North Tayside (Mr. Swinney), who is in his place—are determined to remain part of the British family, because we understand the shared value of the United Kingdom and the strength that we all derive from the historic and successful partnership of the United Kingdom.
For example, my Scottish constituents are proud of Britain's contributions towards overseas aid, debt relief and peacekeeping, and there is more of that in the Budget. We all understand the need to work together on shared problems, such as the current foot and mouth crisis. We will never regard the English as foreigners, with the possible exception of the Leader of the Opposition and one or two of his more alarming acolytes.
Before I conclude, I wish to make two quick points as a rural Member of Parliament, with a farming background.

Mr. Swinney: On the issue of the Scottish Parliament and its development, does the hon. Gentleman have a view on an issue that has reared its head in the opinion polls recently? The majority opinion in Scotland is that the Scottish Parliament should have more powers and, in particular, greater fiscal freedom. Does he support arguments in favour of fiscal autonomy and would he lend his voice to those arguments in the House tonight?

Mr. Home Robertson: I know that the Scottish National party is interested in breaking up the United Kingdom and in establishing Scotland as an independent country, but I do not agree with that. There are immense benefits to be achieved by the partnership of the United Kingdom. Scots should be warned about the obvious costs of separatism, which include the costs of establishing a Scottish army, navy and air force. Moreover, where would our embassies be located if independence were to take place? That is absurd, so the answer to the hon. Gentleman's question is no. I believe that our purpose should be to make the devolution settlement work. I am determined to work with the majority of my colleagues in the Scottish Parliament to ensure that that happens while maintaining the integrity of the United Kingdom.
I was about to make a couple of points about rural issues. First, I wholeheartedly endorse the policy of eradicating foot and mouth disease, which can be achieved only by the rigorous implementation of the slaughter policy. It is a grim process, and I hate to think what it will cost. No doubt Treasury Ministers are turning their minds to that at present, but the alternatives are unthinkable and will certainly be far more expensive. We must persevere with the policy.
In passing, I must say that I am apprehensive about the prospect of a general election at a time when vast tracts of rural Britain are virtually under seige. For example, I do not know how postal votes can be processed when direct postal deliveries are seriously disrupted in many areas. It is a difficult issue, and it is one that my right hon. Friend the Prime Minister will have to take account of along with other considerations. However, I strongly support the action that has been taken by my right hon. Friend the Minister of Agriculture, Fisheries and Food in the difficult task that he faces.

The second point on a rural issue is slightly more personal, but it is relevant to—although at the periphery of—this debate. I would like to comment on my exclusion from agricultural responsibilities when I was a Scottish Executive Minister in 1999. That happened apparently as the result of collusion between the civil servant then in charge of agriculture in Scotland, Mr. Tony Cameron, and the president of the National Farmers Union of Scotland. A new interpretation of the ministerial code was triggered to prevent me, as the Deputy Minister for Rural Affairs, from even seeing papers about agriculture on the ground that I might be perceived to have a personal—

Mr. Deputy Speaker: Order. I am sorry to interrupt the hon. Gentleman, but I must remind him that this is a debate on the Budget resolutions. I am having difficulty in connecting what he is now saying to the main subject before us.

Mr. Home Robertson: I apologise, Mr. Deputy Speaker, but I was hoping for a little leeway, given that this will be my last speech in the House. The point that I want to make is relevant to economic policy.
We now have an interpretation of the ministerial code that prevents people who might be perceived to have interests or even experience in particular industries from holding ministerial office in certain Departments. That trap was sprung on me, and I want to draw it to the attention of the House. If it applied to me as a Minister in the Scottish Executive, it could apply to Ministers in other parts of the United Kingdom. Frankly, that is silly. Members should be aware of the issue, but I shall leave it at that.
The time has clearly come for me to shut up after 22 years in the House. I would like to leave a final message and do so, quite happily, in the presence of the hon. Member for North Tayside. Scottish nationalism is a risk rather than a threat, and the only thing that could aggravate that risk would be to interfere with the formula for distributing the UK Budget between the devolved Administrations. Devolution is all about enabling different parts of the UK to address different priorities in different ways. The House should have the confidence to let that diversity develop, and this mother of Parliaments must always resist any temptation to abuse its power on the distribution of resources in ways that could undermine the vital partnership of the UK.
This is an excellent Budget, which will increase resources for every part of the United Kingdom and for all our vital services, while reducing the burden on taxpayers and businesses. Our economy is going from strength to strength, and we shall be able to take advantage of even better trading opportunities when we are able to join the euro currency zone in the near future. These are historic achievements for a Labour Chancellor. It will be a pleasure to cast my last vote in the House in support of this Budget. I congratulate my right hon. Friend the Chancellor of the Exchequer, and I wonder whether he may yet be destined for even higher office.

Mr. David Ruffley: This was a Budget for complexity. We know that the Chancellor is addicted to complexity in the tax and benefits system and he got yet another fix last Wednesday. His new Labour


nanny statism and his interventionism are deeply damaging to the long-term economic performance of this country and the living standards that all of us—whether on high, low or middle incomes—want to see.
The benign economic conditions, which were largely bequeathed to the Chancellor by my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke), have masked the serious harm that the Chancellor's last five Budgets have done to the country's competitiveness and productivity. All economists of all political persuasions understand that productivity is the key driver of strong economic growth, economic growth that will deliver sustainable rises in public spending and downward pressure on unemployment.
We should all therefore be very concerned by the figures for worsening productivity tinder the new Labour Government. The documents published by the Treasury itself highlight the worrying state of the UK's productivity performance. I also came across a rather chilling statistic from the National Institute of Economic and Social Research last week, which said that, in 1999, the average working hour in the United States was 38 per cent. more productive than an average working hour in the UK. That figure had worsened from a mere 28 per cent. in 1996, so we have evidence of a widening gap with the United States. That story is reproduced in terms of the gap between ourselves and France and Germany.
Why is that occurring? My right hon. and learned Friend the Member for Rushcliffe and others have put their finger on the answer, which is the increasing complexity of the tax and benefits system and the sclerotic state of the British labour market that has resulted from rules and regulations and from the gold plating and the new impositions from Brussels that the Chancellor willingly embraces.
The working families tax credit has been increased in the Budget, but it is turning businesses into outposts of the Department of Social Security. Employers, as well as employees, have to fill in forms. Employees wishing to claim the working families tax credit have to answer interesting questions, such as, "Are you the director of a limited company?". When employers fill in the form, they have to make calculations for each individual employee and pay the credit through the pay roll monthly. At the end of the month, they have to tot up everything that they have paid out and get a rebate from the Inland Revenue. That is all at a cost—we know the cost because the British Chambers of Commerce has told us—of about £300 per employee.
We also know that the working families tax credit, in the labyrinthine form that the Chancellor has introduced it, deters the creation of employment at the margin. We know that because the National Association of Citizens Advice Bureaux said in a recent report that the credit had
backfired for those it was meant to help the most.
The confusion endemic in the convoluted system means that, at the last count. more than 400.000 individuals have not claimed the benefit to which they are entitled.

Mr. Bercow: Does my hon. Friend agree that the administrative burden of the working families tax credit is especially acute for the 99.6 per cent. of British companies

that employ fewer than 100 people? Those companies employ about 57 per cent. of the private sector work force and account for two fifths of our national output.

Mr. Ruffley: My hon. Friend is a doughty and well known champion of the interests of small and medium-sized enterprises in his constituency and beyond, and his point is well made.

Mrs. Mahon: I have many small businesses in my constituency. If the working families tax credit is such a terrible burden on employers, can the hon. Gentleman explain why I have not received a single complaint from them? I would have expected a postbag-full.

Mr. Ruffley: I hesitate to venture that individual businesses in the hon. Lady's constituency might not feel that they would get a sympathetic hearing from a Labour Member of Parliament. I have had many complaints from companies in my constituency. The British Chambers of Commerce has received many complaints, and my remarks about that are on the record. Even the National Association of Citizens Advice Bureaux has made the point that the working families tax credit is damaging the interests of the people whom it is most meant to help.
The children's tax credit has risen to £520 a year in the Budget. Some 10 million couples in receipt of married couples allowance temporarily thought that the CTC would be a replacement, but only 5 million of those couples are eligible for it. We discover that only 3 million of them have bothered to claim. Why might that be? First, a family with two earners who each receive a salary just below the top-rate tax threshold—for example, £30,000 a year—will receive the full credit, but if one working partner earns over £41,375 a year, the family will not receive the credit at all. However, if one partner earns less than that, but more than the top-rate tax threshold, the family will, depending on the increase in their income, receive a tapered relief, giving them a fraction of the full amount. That is a complex issue, as well as being unfair.
Secondly, the Inland Revenue will have to check whether couples who are claiming the CTC are cohabiting. Finally, the working families tax credit interacts with the children's tax credit. As a constituent pointed out in my surgery last week, that means that she will be no better off, even assuming that she is able to find her way through the thicket of rules and regulations.
We must fear not, however, because the Chancellor of complexity is here to help. He will abolish child benefit, working families tax credit and children's tax credit and replace them, in 2003, with something called the integrated child credit. We must not forget that that will run in tandem with the new employment credit. That complexity is nothing short of a disgrace, and it is all down to the Chancellor of complexity.
The Chancellor's magical mystery tour of the tax and benefits system has also given us the infamous minimum income guarantee for pensioners, which was increased in the Budget. A pensioner who wants to claim that benefit currently has to fill in an intrusive 43-page form. It contains such gems of questions as, "Are you pregnant?", "Are you on strike?", "Are you on parental leave?" and, intriguingly, "Are you in possession of a credit insurance policy covering your credit card?" It is little wonder that more than 500,000 pensioners who are eligible for the


benefit have not claimed it, either because they cannot understand it or because of the intrusiveness of the questions asked when they claim.
Disgracefully, the minimum income guarantee has increased the percentage of old-age pensioners who are now subject to a means-tested benefit from 38 per cent. under the previous Government to almost 60 per cent. when the pensioner tax credit is taken into account. Those figures come from Age Concern, which helpfully reminds us in its briefing that the increase is in contravention of what the then shadow Chancellor said in 1993 about ending means-testing for old-age pensioners.
We must also remember that the minimum income guarantee saps personal responsibility and an individual's dependency on their own savings. The savings industry tells us that the stakeholder pension is now a busted flush because it is simply not logical for individuals to save under the stakeholder pension with the MIG set at its existing level.
The Chancellor of complexity's Kafkaesque odyssey extends even further, beyond the MIG, the CTC and the working families tax credit to the corporate sector. The Chancellor's earlier Finance Acts contained two major reorganisations of capital gains tax, and another has been announced in this Budget. It is getting to the point where chartered accountants cannot easily, on their first attempt, calculate accurately the CGT liability of a small business or even an individual. More than 3,000 major new regulations that affect business have been introduced since 1997, which is a post-war record. The Chancellor has done nothing about that and appears not to care or to see the significance of that increased red tape. "Tolley's", the tax bible, which I was privileged enough to use when I was a legal practitioner many years ago, has now almost doubled in size as a result of the last five Brown Budgets.
It is small wonder that Standard Chartered bank said:
Tax systems in other countries are getting simpler but in Great Britain against the international trend it is becoming more complicated and getting in the way of decision making.
Digby Jones of the CBI agrees with that analysis and has warned the Chancellor publicly to "get serious" about deregulation and tax simplification. Only last week, immediately after the Budget, an Ernst and Young survey of 650 businesses said that, on balance, it would discourage inward investors, who are usually the productivity leaders in the British economy.
Economists understand that the tax and benefits complexities of which I and other hon. Members have spoken are not merely an irritation or an inconvenience; they damage the national economic performance of UK plc and, ultimately, the living standards of all. That catalogue of complexity is all down to one man—the Chancellor. The Labour-dominated Treasury Committee published a report in January on the Chancellor's stewardship of the economy which said that
it remains difficult to identify anyone in the structure who has the background and the capacity to think about the tax system as a whole
and that
policy is more likely to be successfully formulated and implemented if everyone is clear from the start what the objectives are and why

What a damning condemnation that is. The Committee went on to say that the memorandums that members of the Committee receive from tax professionals and others
support the conclusions that the tax system is too complex and that serious attempts to reduce complexity have been avoided; that tax reforms are too often undertaken without adequate analysis of the likely effects; and that consultation on detailed tax reforms is not yet regarded as standard practice. despite the introduction of the annual Pre-Budget Report
We know what a farce that is. The Committee concludes:
We firmly believe that in the area of tax policy the Treasury could do better. We recommend that the Treasury give more attention to this area in order to ensure the tax system is 'fair and efficient'".

Mr. Bercow: My hon. Friend will not want to understate his case. Does he agree that the increased complexity of the tax system is not accidental? Rather, it is a calculated—and I hope unsuccessful—attempt by the Chancellor to hide the tact that people who are married, who pay mortgages, who own cars and have the temerity to put petrol in them, who acquire savings, who possess pensions and who run businesses all face a higher tax burden under this Chancellor.

Mr. Ruffley: My hon. Friend anticipates me. Many of us are wise to that fact. I am sure that his comments are informed by what the good burghers of Buckingham tell him, because my constituents have been saying the same thing. They understand the situation.
The report accuses the Chancellor of being, at worst, power mad and bonkers, as one of his new Labour colleagues described him. [interruption.] As my hon. Friend the Member for Buckingham (Mr. Bercow) correctly observes, that description is on the tepid side. At best, the report shows him to be an obsessive interferer, fixated with the idea that other Departments do not understand anything and cannot be trusted. He appears to think that he can micromanage business and run everything, but he cannot.
I fear that the Chancellor of complexity is not merely misguided: two much darker, more dishonest and sinister purposes lie behind this and his other four Budgets. First, he is deliberately bringing middle-income Britain into the state dependency net. The benefits and breaks of the children's tax credit, the working families tax credit and the baby bonus extend much higher up the income scale than any other comparable measure. He is trying to lure middle-income Britain into the net of dependency while disguising his truly cack-handed attempts to help people lower down the income scale by the ham-fisted redistributionism of old-style socialism. This Budget and previous Brownian Budgets are nothing less than socialism by other means.
The second purpose is even worse. The Chancellor pretends that his complicated tax changes are tax cuts, but they are nothing of the sort. New Labour is deceiving us. It is using this complex system to hide the fact that tax is rising. The complications that he has introduced into the system are a naked political attempt to try to bamboozle the electorate in the hope that he will negate taxation as an electoral issue. In reality, all we are left with is a mess of fiddled figures, amounting to no more than a large dollop of brown fudge.
The Red Book is nothing but a disgrace. The standards that would usually be expected from impartial officials are in danger of being jeopardised. The most impartial


observers in the City of London who have to analyse Budgets for their clients and banking institutions think that the Red Book is an unprecedented disgrace.

Sir Michael Spicer: I am following my hon. Friend's brilliant speech with care, especially what he says about the Chancellor's tax rises. Why does he think that the right hon. Gentleman bothers to disguise those? Surely, if my hon. Friend were a socialist—like the Chancellor and his party—he would be proud of a tax-rising Budget and a tax-rising regime, because that produces tax expenditure.

Mr. Ruffley: I have the honour of serving with my hon. Friend on the Treasury Committee and he poses a question that many other Committee members and journalists have asked. I believe that if the Chancellor told the truth to the British people, he would be out on his ear pretty smartly. He is fighting a tough rearguard action to conceal the truth from the British people, but I know that with my hon. Friend's help and that of my colleagues on the Conservative Front Bench, we will expose new Labour's fundamental deceit.
On the meat—the detail—of the tax increases, we know from the Red Book that taxes are £28 billion higher after the Budget than they were at the last election. Of the 45 new stealth taxes, approximately half are levied on business and half on the personal sector. The Chancellor may be in denial about tax rises, but if he looks at tables C23 and C9 in the Red Book, he will discover that the tax burden in 1996–97 was 35.2 per cert. under the excellent stewardship of my right hon. and learned Friend the Member for Rushcliffe, and that it is 37.7 per cent. in the current financial year. His own figures show an increase of 2.5 per cent. Of that there can be no doubt. It is only a pity that he does not cough to the truth, but I fear that he will not.
Taxes are up on marriage, mortgages, personal pensions and petrol. Households are paying more indirect tax in the form of higher council tax. The Government have starved rural authorities such St. Edmundsbury council in Suffolk, which is in my constituency, of rate support grant. They have deliberately targeted them and forced them to increase council tax to make up the shortfall. The public are not stupid. They know what is going on.

Mr. Dale Campbell-Savours: Will the hon. Gentleman give way?

Mr. Ruffley: With a due sense of dread and regret.

Mr. Campbell-Savours: I have a simple question. Does the hon. Gentleman want to comment on whether it is helpful to pay off Government debt?

Mr. Ruffley: It is helpful, but we need to strike a balance. Paying it off saves about £1.5 billion in debt interest, but there is a more imaginative proposal. The hon. Gentleman probably does not keep up with the literature, so I shall give him the details. My hon. Friend the Member for West Dorset (Mr. Letwin) has come up with a radical and innovative plan to use mobile phone receipts to establish a higher education endowment fund, which has been extremely successful at Princeton and Harvard. The balance sheet for higher education spending

would be relieved, over time, by that fund. However, on the hon. Gentleman's core point, of course it is intelligent to pay off debt if the money is available.

Mr. Oliver Letwin: Does my hon. Friend agree that there is another strange feature of the scene? The Chancellor has diminished the prevalence of gifts in the long-dated market without relieving the annuity provisions for people over 75, causing widespread and unnecessary misery.

Mr. Ruffley: My hon. Friend's intervention allows me to showcase some of the excellent policies that have been developed by the Conservative Treasury team. My hon. Friend the Member for Arundel and South Downs (Mr. Flight) has addressed the matter of annuity provision. That and the excellent policy on endowing higher education institutions are testimony to the fact that the Conservative party has been doing some serious thinking in opposition. We are raring to implement the policies in office.
We know that higher taxes on marriages, mortgages, petrol and personal pensions and even higher increases in council tax have had an effect on the incomes of real people in real households. As Credit Suisse First Boston has helpfully calculated in the past month, household disposable income, which is arrived at when all direct and indirect tax and inflation has been taken into account, has increased by only 1.6 per cent. under this Government. There was a 2.9 per cent increase under the regime of my noble Friend Baroness Thatcher and a 2.5 per cent. increase between 1990 and 1997. As my right hon. and learned Friend the Member for Rushcliffe observed, the Government are laggardly on economic growth and in delivering increases to ordinary households. When those families look at increases in their disposable income, they see that they are worse off than they were under previous Administrations.
The Conservative party will give people back their own money. After all, they earned it. They can spend money that they have earned and saved better than big government and certainly better than the new Labour Government. Overtaxing is not clever. My auntie could have overtaxed to the extent that the Chancellor has and delivered a huge surplus. There is nothing clever about that. We would give £8 billion back in tax cuts, funded by £8 billion of costed savings from the huge total of more than £400 billion a year that the Chancellor proposes to spend. If Labour Members are in any doubt about how deliverable that is, may I remind them that the state spends a total of £400 billion? Our proposal is practical, modest and will not frighten the horses; we propose that £8 billion, or 2 per cent. of that £400 billion, can be saved. In any business, that percentage would, dare I say it, be seen as a bog standard saving. The saving is not at all difficult to achieve.
We have published details of our proposals and we can give the money back. I shall quickly examine who will be the targeted beneficiaries of Tory economic policy. The abolition of the savings tax for everyone on basic and lower-rate tax will reward those who do the right thing and take personal responsibility for themselves and their families. We will also increase the age-related allowance for pensioners, taking 1 million pensioners out of tax altogether. As my right hon. Friend the Member for


Kensington and Chelsea (Mr. Portillo) said, those pensioners who remain taxpayers will be about £8.50 better off a week.
We will introduce a transferable tax allowance, worth up to £1,000 a year, recognising married women who wish and choose to stay at home to look after children under 11 and women in a similar position who decide to look after an aged relative. Those are the common-sense principles in which our party believes. We are backing our beliefs with real money, because those women would be up to £1,000 better off. Finally, we will reduce tax on petrol which, as my constituents in Bury St. Edmunds never tire of reminding me, is still, even after the Budget, the highest in Europe.
Those sensible Conservative reductions in wasteful expenditure and the tax burden will deliver incentives for work, saving and investment to stimulate the growth that will and must deliver higher living standards to all the British people. That is the Conservative way. The Labour way is the way of Complexity Brown, a man in the clutches of the delusion that interference and lever-pulling deliver the goods. That is a socialist fallacy in a modern setting. It has never worked and, as we shall soon learn, it will not work this time either.

Mrs. Alice Mahon: I do not know whether to congratulate the generous Chancellor or the socialist Chancellor. Perhaps I should congratulate him on both counts.
Congratulations on the Budget are in order. The Government and the Chancellor should be applauded for a very good Budget, which is based on the competent management of the economy. It is worth repeating just how good the economy is and how it has been turned round. We have the lowest inflation for 30 years, which is really good news for anyone on a fixed low income. We have the lowest long-term interest rates for 35 years; that is very good news for Halifax, which has a high owner-occupier population. On average, mortgages are now £1,200 a year less than they were under the previous Government. More people are in work than ever before and we have the lowest unemployment since 1975. All those things are worth repeating again and again.
In Halifax, 3,463 people were unemployed in April 1997, but now the figure has fallen to just over 2,000—a drop of 36 per cent. Under the new deal, nearly 1,400 young people have found work or gone into training or higher education. The means-testing of pensioners has been criticised. I am not a big fan of means-testing; I support universal benefits, and always have done. However, at least 3,000 pensioners in Halifax—not a small number—have gained from the minimum income guarantee. From this April, a single pensioner will be on £92.15 and a pensioner couple on £140.55. That is not to be sneered at; it is to be welcomed.
All the 18,253 pensioners in Halifax benefit from the winter fuel payment given to households with someone over 60. The benefit is immensely popular—indeed, it is one of the most popular benefits that we have introduced. It is so popular that the Conservatives have said that they will not abolish it. It is not means-tested and it is flexible; people can use it when they need to and spend it on the

energy that they want. In Halifax, a large number of pensioners over 75—at least 7,301—have benefited from a free television lice nee, saving them £104 a year. They have an extra £2 of income a week, which they can spend as they wish. As the Paymaster General is on the Front Bench, I shall repeat my bid for the free licence to be extended to everyone over 65.
From April, all the 18,253 pensioners in Halifax will get a boost in the state retirement pension, which will rise by £5 for a single pensioner and £8 for a couple. We must remind those who have listened to the Tories' promise to match that increase chat the Tories had 18 years in which to do something about pensioner poverty. I have been in the House long enough to remember a 37p increase in pensions, so we should have no nonsense from the Tories about 75p—[Interruption.] Yes, there certainly was a 37p increase.
The Chancellor has worked on the pension credit, which will be introduced in 2003. He should be commended for locking ahead and examining how we increase pensioner incomes. I should like the link between earnings and pensions to be restored, but I will take whatever is on offer. Over the years, I have had experience of dealing with pensioners on low incomes, so I know that any money is welcome. I can sell the package to my constituents and am proud to do so. This is a good Budget, built on good measures that have been introduced over the years.
I turn to families, and could not disagree more with the hon. Member for Bury St. Edmunds (Mr. Ruffley), who criticised the working families tax credit. More than 4,500 working families with children in Halifax are benefiting from the working families tax credit. They are guaranteed an income of nearly £220 a week, which is an enormous boost for low-paid families struggling to bring up children.

Mr. Ruffley: I am grateful to the hon. Lady. I would not want her to go away with the impression that I was against more money for those families. She is well aware that the working families tax credit is no more than re-badged family credit, which was introduced by my noble Friend Lord Lawson. The issue is not that we do not want to benefit those families but the manner in which that help is delivered. The burden of my argument was that it is much too complex.

Mrs. Mahon: The hon. Gentleman will agree that the present benefit is far more generous than family credit. My hon. Friend the Paymaster General should be congratulated on the hard work that she has done to introduce the working families tax credit, which is an excellent benefit.
I congratulate the Government on child benefit, which is a very good payment. It goes to the mother, and into her purse. In 1997 child benefit was £11.05 for the first child. From April this year, it will be £15.50, which is a significant increase. The mother can rely on receiving the payment every week. I am pleased with the measures that are being introduced. The Budget contains many more measures for the family, on which the Government are to be congratulated.
The shadow Chancellor sneered at the tax cut for the lower paid. I can tell him that 12,745 families in Halifax will receive the benefit of that, on top of all the other


measures. If the shadow Chancellor and some of his hon. Friends who sneer at the size of the tax cut had any experience of living on a low income and managing a budget, they would not have made that criticism. They do not understand poverty, and they do not care.
On education, my constituency was at the heart of a scandal concerning The Ridings school, which was dubbed the worst school in Britain. It certainly was not the worst, but there were problems at the school and the media became interested. The Government have ensured that that school is properly resourced. I am sure that everyone read in the national press about the excellent Ofsted report and about how that school is coming up. The children are learning and want to learn, and congratulations are due to Anna White, the teachers, the governors and the children, and to the Government on putting money into the school.
I was delighted when the Chancellor said that local schools will get more direct cash payments. That is a popular measure: heads and teachers like it. They know the weaknesses and the strengths of their schools, and they can spend the money accordingly. I repeat to the hon. Member for Truro and St. Austell (Mr. Taylor) what I said in my intervention. I invite him to come to Halifax and see the new buildings.
The hon. Gentleman should come to Sowerby Bridge school, where I took a member of our Front Bench team when we were in opposition, to see a school that still had the same desks that my husband, who is over 60, had used when he was at the school. I invite the hon. Gentleman to come and see the refurbished school now, with its new computer centre and its wonderfully equipped new classrooms. On top of that, we have been promised £36 million for a brand new secondary school. I thank the Government for that very good news This is the first time in years that we have seen such spending on education.
My right hon. Friend the Secretary of State for Health made some important announcements today, pursuing the national health service plan and putting in the resources necessary to implement it. The plan is excellent. It is what the NHS needs and it is long overdue. The Government have guaranteed that our health authority allocation will rise in real terms by at least 6 per cent., and by 6 per cent. for the following two years. That substantial increase in our allocation is welcome.
We have been through a difficult time, but this afternoon's announcement and some of the measures in the Budget mean that we will be able to implement the plan. I congratulate the Government on our new hospital, which will open in June. There has been a merger between Calderdale and Kirklees, and we now have a merged trust. the Calderdale and Huddersfield trust. A new chief executive was appointed today. I am disappointed by the appointment, and I intend at a future date to ask for a debate on the subject. There is a flaw in the power of the regional directors and the way in which they appoint all administrators.
The appointment will be bad news for those of us in Calderdale who have spent years trying to get a new hospital. We now have it, but we will have a hostile chief executive, who did not want the new hospital and does not want two accident and emergency services. We are getting the money in through the Budget, and we could have one such service in Huddersfield and one in Halifax. We desperately need two accident and emergency services

because of the geography of the area, but the new chief executive is not in favour of that. I believe that she will work hard to take women's and children's services away from Calderdale, which will be a tragedy. We have been commended by all the experts for our neonatal intensive care unit, and we are getting the money now to ensure that we have excellent services in that field.
We have enough money from the Budget allocation to have the headquarters of the merged trust in Calderdale, which would be the only fair thing to do. The health authority headquarters are in Huddersfield, and in the interests of fairness, the trust headquarters should be in Calderdale. I know that that will lead to another fight locally, following the selection of Diane Whittingham.
The extra money in the Budget is needed in Calderdale, and is extremely welcome. Our state-of-the-art hospital would never have been built without a Labour Government. The merger was managed extremely well by the departing chair, Pam Warhurst, and others, who should be congratulated on trying to keep the two communities together. Following the merger, we can attract the best doctors and nurses. It is a pity that that wonderful record has been spoiled by a civil servant, Peter Garland, who put his own empire-building before the best for my constituents, but I make a pledge: I shall fight for those constituents and for Halifax. My hon. Friend the Member for Calder Valley (Ms McCafferty), who cannot be present today, would say exactly the same.
This afternoon we heard the Secretary of State tell us that we are aiming for 20.000 more nurses and 7,000 more consultants. We desperately need them. I was pleased to hear that there has been a 56 per cent. increase in the number of applicants for nursing and midwifery courses. I am ecstatic about the visionary extension of child care help in the NHS, which will attract people back and ensure that their skills will not be wasted and under-used at home. I congratulate the Government on the increase in the student bursary. It is not enough yet, but it is a good start.
I hope that my hon. Friend the Minister of State, Department of Health, who is on the Front Bench, will forgive my little moan. It has been a good news story for health today, but I urge him to look at the flaw in the selection of chief executives, which is not democratic or fair. If we are serious about being equal opportunity employers, we should examine the civil service guidance, which gives one civil servant far too much power over everything.

Mr. John Swinney: The hon. Member for East Lothian (Mr. Home Robertson) said that his speech today was likely to be his last to the House of Commons, after a career of 23 or 24 years here. This is probably my last speech in the House of Commons as well and, like the hon. Gentleman, I shall concentrate on my work in the Scottish Parliament. I leave the House with perhaps not quite as much nostalgia as him, but I, too, look forward to my continued service in the Scottish Parliament.
The hon. Member for Bury St. Edmunds (Mr. Ruffley) made an interesting and lengthy contribution, in which he said that the Labour Government were deceivers on tax and spending. I think that I can agree with him on that point. The Government have successfully created a new


art of spinning to their advantage an incredible quantity of financial information that amounts to little in terms of different news. I should like to concentrate on the Government's position on tax and spending, and on what they have said about the family.
In the pre-Budget report and elsewhere, the Budget has been trumpeted as a great deal for families. However, let us consider what families are experiencing. First, as a result of the Budget, families in Britain are still paying the highest fuel taxes in Europe. The Chancellor has not changed that at all. Obviously, any fuel duty reductions are welcome, but surely the amount that is levied can move in only one direction after the trend that it has followed under this Government and the previous, Conservative Government.
Secondly, some of the poorest families in North Tayside are paying the most extraordinary charge increases for certain local authority services. Under this Government, some of my constituents have seen their charges for water and sewerage services increase by 250 per cent. Indeed, they are rising almost as fast as the salaries of the chief executives of the water quangos over which the Government have presided, which rubs salt into people's wounds.
Thirdly, families in my constituency are paying in back-door taxation the equivalent of an extra 9p in income tax because of the various tax changes made over time by the Chancellor. The Government have kept their commitment not to increase the basic rate of income tax, but have used just about every other possible dodge in the book to get more money out of the ordinary, hard-working families that they were supposed to be supporting and helping. Instead of assisting such families, they have spent most time penalising them.
Fourthly, I suspect that many families voted for the Labour party on the basis that it would take action to relieve their poverty. When the Government took office in 1997, 30 per cent. of families in Scotland were living in poverty. After four years, we have arrived at a miraculous situation in which 30 per cent. of families are still living in poverty. In the light of that statistic, the Government have decided that it would be too embarrassing for words to calculate the level of poverty since 1997, so they are trying instead to deal with it from 1996. That shows a modest decline, but airbrushing 1997 out of the history books is not a short cut to achieving their objectives. A great number of people, whether they are in poverty or not, are left disheartened and dejected at the Government's lack of progress.
Fifthly, families are undoubtedly wrestling with a world that is now much more complex. The hon. Member for Bury St. Edmunds said a great deal about the complexity of the system. I do not dispute the fact that the Government are introducing beneficial measures regarding the working families tax credit and the children's tax credit, but I question the accessibility of the opportunities that they provide. I was struck by the Inland Revenue's confirmation that almost a million people who are eligible for the children's tax credit have not lodged an expression of interest in it. That comes on top of evidence that half a million pensioners have failed to apply for the minimum income guarantee and to work through the 40-page form that must be completed in order to make such an application.
All those indications show that the Government's approach to redistribution involves obstacles that the Chancellor must surmount to ensure that all families who are in need have a proper opportunity to access the information and credits to which they are entitled. The system's complexity has excluded a number of people who desperately need the support that is available from the Government, not least through the measures recently announced, and it shows no signs of getting any simpler.
The Chancellor has made a great deal of honouring his manifesto commitment not to raise the basic rate of income tax. It would be churlish to dispute that commitment, but I calculate that 28 tax rises have been made under the current Chancellor—an analysis that is supported by the Library. I am sure that the Conservative party can justify its argument that there have been 45 rises, but the 28 rises of which I am aware are equivalent to the application to ordinary people in our society of a 9p increase in income tax. The total UK tax burden has increased from 36 per cent. of GDP in 1996–97 to an estimated 40 per cent. in 2000–01.
Those increases nail the Chancellor's repeated claim that he is a tax-cutting Chancellor. There is no doubt that he is a tax-increasing Chancellor. Any redistribution measure or evidence of a tax-cutting agenda in the Budget is more than outweighed by the fact that he has raised more than £23 billion in additional taxation by imposing the changes to which I have referred. Ironically, there is a direct equivalence between the £23 billion in tax rises and the £23 billion surplus announced in the Budget statement. The Chancellor has imposed the 28 tax rises through the back door, but they have resulted in even more tax increases for ordinary families. As I said, they include greater water charges in Scotland.
It comes as no surprise that a recent poll whose results were published in The Herald suggests that almost 60 per cent. of people in Scotland think that Labour has broken its tax promise. The public are now beginning to see through the propaganda, spin and representation of the same arguments. They can see that the tax burden has increased for ordinary people and that Labour cannot be trusted on tax.
Just as Labour cannot be trusted on tax, so it cannot be trusted on spending. I would rather listen to what real doctors say about public expenditure than to what spin doctors say about it. A recent British Medical Association survey showed that 80 per cent. of Scottish GPs believed that there had been a decline in hospital care since Labour took office. I was intrigued by the bullish way in which the Secretary of State for Health presented the Government's health record, as they cut real-terms expenditure on the health service in Scotland during their first year in office. As much as I criticise the Conservative party for its ghastly expenditure and public service record in Scotland, I must accept that even it did not make such a cut in all its 18 years in power.
To compound the matter, the Government starved public services during their first two years in office. Even at the end of the comprehensive spending review period, they will be spending less of the nation's wealth on public expenditure and services in Scotland than the Conservatives were at the end of their period in government. Public expenditure increased by 2.6 per cent. a year in real terms under the Conservatives. On average, it rose by 1.8 per cent. a year from 1979 until 1997. After the current Government came into office, however,


expenditure rose by 1.2 per cent. a year from 1997–98 until 2000–01. I suspect that the current Parliament is unlikely to last for five years, but, if it does, the next such figure will be 1.9 per cent. That puts into context the Government's change in public expenditure.
I was struck by a written parliamentary answer given in the Scottish Parliament, which showed that when the Conservatives left office they were spending 1.8 per cent. of United Kingdom GDP on public expenditure in Scotland. In 2003–04, the figure will reach only 1.84 per cent. at the end of the comprehensive spending review period. That shows that the Government are not investing as much of the nation's wealth in public spending as has been invested in the past.
The Government say that new expenditure will result from the Budget, and that is true. By my calculations, an extra £200 million, spread over three years, will come to the Scottish Parliament in the block formula. However, we must bear in mind the fact that, although that £200 million will be welcome, the Scottish Executive managed to underspend their budget last year by £435 million. We must put the scale of the latest increase into some sort of perspective, in terms of the increases in expenditure that the Chancellor has announced.
The hon. Member for Halifax (MI s. Mahon) described real life in her constituency to the hon. Member for Truro and St. Austell (Mr. Taylor) in terms of investment in public services. I am sure that she knows her constituency extremely well, but we all have such a constituency record and we are all aware of the limitations of public expenditure. I am certainly very concerned by what I see and hear, for example when I speak to representatives of the health authority in my constituency.
The health authority is wrestling with a £10 million deficit, which has to be eliminated before it can obtain any long-term investment for health services in the Tayside area. Countless schools in my constituency need refurbishment, and we are a long way down the priority list in terms of investment. We must keep our feet on the ground when we consider the Government's actions on public expenditure, because they are not making the quantum difference that they boasted would be the case.
The condition of the economy has teen the subject of many bullish remarks by the Chancellor, and by the Secretary of State for Health when he opened this debate. Since the Government came into office, there have been four quarters of negative economic growth, in which the economy has not increased in size. The economy in Scotland is not doing as well as that of the rest of the United Kingdom, and the latest figures show that the rate of growth in the Scottish economy is 1.6 per cent., compared to 3.4 per cent. for the UK as a whole. For the sake of international comparison with some of our small, European counterparts, I can tell hon. Members that economic growth in Ireland is projected to be 8.7 per cent. in this financial year.
Manufacturing losses in Scotland have been enormous, and the latest statistics show that manufacturing exports are down. In a number of manufacturing sectors—for example, the drinks industry, paper manufacture, food, tobacco, mechanical engineering and textiles—export figures are down. Let us also, therefore, keep our feet on the ground when considering the economic performance about which the Government are so keen to boast.
Obviously, almost everyone welcomes the decrease in unemployment. The International Labour Organisation employment trends, so frequently used by the Government as their favoured mechanism, suggest that 8.7 per cent. of the population of Scotland were unemployed in 1997, and that that figure is now 6.4 per cent. However, a much more dramatic decline has taken place in Ireland, where, according to the ILO, unemployment was 10.3 per cent. in 1997 and is now 4.3 per cent. We must, therefore, be aware of the scale of economic activity and economic progress that can be achieved in comparable circumstances.
The Chancellor has tried to present an image of a low-tax, high-spending Budget. However, he has delivered a high-tax, low-spending record, and that has led to under-performance in our economic base. It is essential for the Chancellor to recognise and accept the public mood on this issue. There is a need for much greater honesty and transparency in the tax system. People are beginning to tumble to the fact that they are paying more tax than they used to, and it is high time that the Chancellor demonstrated some transparency in the way he explains those issues to the public. The public now clearly understand that, although the promise of low direct income tax has been kept, they are paying high indirect taxes. The fuel crisis of last summer represented an explosion of people's anger that should act as a warning to the Chancellor. There is also a necessity for claims about public expenditure to be founded on reality, rather than on the extravagant claims that the Chancellor has set out.
The hon. Member for East Lothian advised the House earlier that, as part of maintaining the United Kingdom, it was essential that no one interfered with the funding formula that underpins the funding of the changes to public expenditure in the Scottish Parliament—the so-called Barnett formula—which the hon. Gentleman presented as a great formula.
The Barnett formula is often misunderstood. It is a converging formula, designed to bring per capita public expenditure in Scotland into line with per capita public expenditure in England. In certain identifiable areas of public expenditure, there is a difference. We must be clear that the formula is designed to reduce public expenditure in Scotland, and it is doing so. The gap between per capita public expenditure in Scotland and England is declining year by year because of the vigorous application of the Barnett formula.

Mr. Andrew Love: Will the hon. Gentleman give the House an idea of when that convergence will take place, and when expenditure in Scotland will be the same as that in England?

Mr. Swinney: I think that the Chancellor would be able to give the hon. Gentleman a better projection on that issue than I could. However, the pattern is taking its course and is being vigorously implemented by this Chancellor. People should be aware that that is the pattern of our public expenditure.

Rev. Martin Smyth: On that point, is the hon. Gentleman aware that we are discovering in Northern Ireland that health expenditure will be cut year by year in the near future because of the implementation of the Barnett formula?

Mr. Swinney: Let us be clear on this point. In the present context, public expenditure on health will increase


at a slower rate in Scotland—and, I assume, in Northern Ireland and Wales—than it will in England. That is the real impact of the Barnett formula: it is designed to bring about convergence. That is a challenge for those of us representing Scottish constituencies. I hope that the very worthy Scottish National party candidate standing in the North Tayside constituency at the general election will be able to come to the House and inform it of his concerns about the Barnett formula for a limited period in the years to come, before he returns to an independent Scottish Parliament.

Mr. Home Robertson: rose—

Mr. Swinney: I shall give way to the hon. Gentleman in just a moment.
The purpose of the Barnett formula is to bring about the convergence of public expenditure in Scotland, Northern Ireland, Wales and England. The challenge for people interested in promoting and expanding public services in Scotland will be to secure access to the resources that will allow us to do so, and to maintain a high quality in those public services. I have a solution to that challenge, but I shall wait until I have heard the intervention from the hon. Member for East Lothian.

Mr. Home Robertson: I want to pick up the hon. Gentleman on the point about the peregrinations of SNP politicians. Does he believe that the hon. Member for Banff and Buchan (Mr. Salmond) is really a true Brit, and that he will stay here, or does he think that he will return to the Scottish Parliament again?

Mr. Swinney: My hon. Friend the Member for Banff and Buchan (Mr. Salmond) has a distinguished record in the House, and he is a formidable campaigner and champion of Scottish interests. He has fought a valiant campaign on behalf of Scotland's fishing industry over the past few weeks, which the Scottish Executive would do well to listen to. I think that they are probably listening to it in Edinburgh even as we speak.
I am sure that my hon. Friend the Member for Banff and Buchan will serve in this House for just as long as it takes to secure Scottish independence, and then return to the Scottish Parliament. He might see the hon. Member for East Lothian there, if the hon. Gentleman manages to hold on to his seat long enough to continue to serve in that other place. However, I must return to the Budget debate before I am reprimanded, Mr. Deputy Speaker.
A vigorous debate is emerging about the long-term funding of the Scottish Parliament. The right hon. Member for Haltemprice and Howden (Mr. Davis), the Chairman of the Public Accounts Committee, recently made an interesting speech about fiscal autonomy—I intervened on the hon. Member for East Lothian on that point—whose purpose was to acknowledge that the Scottish Parliament needs the fiscal responsibility to take major decisions on public services, public expenditure, taxation and revenue raising on behalf of people in Scotland. Most important, certainly from my point of view, it should be able to manage and steward the natural resources of Scotland, take decisions about our revenues and our expenditure and pay to the United Kingdom Parliament a sum in respect of services provided to Scotland in the longer term.
That debate about fiscal autonomy is vigorous and within it lie the answers to the limits placed on our public expenditure because of convergence under the Barnett formula. I hope that ether political parties in Scotland will engage with the debate because it contains the germs of the next development of the constitutional argument, which will further strengthen the Scottish Parliament. That will be good for Scotland and good for the public services of Scotland.
The Budget is heavily based on the spin that we have become accustomed to from the Chancellor. He suggests that he has cut taxes and increased spending, but he has of course done neither. At the forthcoming election, the public will show whether they have seen through him. As a result of the Budget, being seen through is what he deserves.

Ms Claire Ward: It is always interesting to listen to Opposition Members. The hon. Member for Bury St. Edmunds (Mr. Ruffley), in response to an intervention by my hon. Friend the Member for Workington (Mr. Campbell-Savours), suggested that paying off our debt is a good idea if we have the money. I take that as an official response from the Conservative party, which I understand has given a commitment to equal the public services spending announced by my right hon. Friend the Chancellor. Yet the Tories also talk about making bigger tax cuts. Their sums do not add up: the funding is not there to achieve all that.
The hon. Gentleman said that the Conservatives would find savings of £8 billion, but the information on the Opposition's alternative Budget, which I have read, suggests that it is based on a number of false premises. One is that £250 million could be saved from money being spent on regional government. Obviously it has escaped Opposition Members' attention that the Government are not spending that money, so it cannot be saved. That point highlights the problems of the Conservative Opposition and their inability to run the economy, which w a; apparent in the past.

Mr. Letwin: Is the hon. Lady accusing her own Front Benchers of deceiving the nation in their latest annual report, which says that they are on course for regional government?

Ms Ward: That is not the issue, as the hon. Gentleman well knows. He knows from his party's policies that the Conservatives claim that they would save money that is already being spent, but that money is not being spent. That is crucial.

Mr. Letwin: rose—

Ms Ward: The hon. Gentleman is very keen, so I shall let him intervene again.

Mr. Letwin: Would it help the hon. Lady to know that the planned savings that we have specified vis-a-vis the Chancellor's plans relate to 2003–04? As far as I am aware, that year has not yet occurred.

Ms Ward: That is true, but the proposals relate to spending that has already been undertaken and cuts in


spending on regional government. The hon. Gentleman shakes his head but, according to the Conservative budget, that spending has already been allocated, even though the money is not being spent by the Government.
That is just one issue on which we heard from Opposition Members. The right hon. and learned Member for Rushcliffe (Mr. Clarke) suggested that he is not terribly confident about the projected growth of the economy as forecast by my right hon. Friend the Chancellor. Indeed, I think he said that he would not bank on it. If he is not prepared to bank on it, perhaps he is prepared to bet on it, because the Chancellor has made betting free. Such a bet would be a good investment. I am not a gambler, but I respect the right of others to gamble and the proposal will encourage companies that took betting offshore to return to this country, which will benefit not only those who bet, but Government revenue. Everybody is a winner on that one.
The Budget is welcomed by my constituents, who will benefit from a range of policies. They will certainly benefit from the announcements on continued investment in the national health service made by my right hon. Friend the Secretary of State for Health this afternoon. I welcome the opportunities to encourage the recruitment of more general practitioners and more nurses through additional payments. In the area that I represent, it is increasingly difficult to recruit and retain people in the public sector because even though there are so many jobs available in Watford and around London, the cost of living is incredibly high.
When people have a choice about where to work, they do not automatically choose a hospital in the south-east, for example, if they can choose one in London. Costs in the south-east are the same as in London, so I welcome the proposals and hope that my right hon. Friend will recognise the needs not only of Watford, but of other areas close to London that need investment and encouragement for public sector workers to live in the area.
On a point of information, this afternoon I attended the opening of two new key worker houses in my constituency, which were established for police officers. That is an example of how a partnership involving housing associations, local authorities and the public sector can provide the sort of accommodation that is vital to encourage and enable people to live in the constituency and serve in the police force. I hope that such arrangements will be extended to other public sectors, especially health.
We already have a good record on the health service. In the Watford constituency, West Hertfordshire health authority has gained significantly from the Government. In 1996–97, it received a percentage increase of only 3.2 per cent., which was a real-terms increase of only 0.5 per cent. For 2001 and 2001– 02, there will be 8.6 per cent. increases—6 per cent. in real terms. That will make a massive difference to the service that the health authority and the hospitals are able to provide to my constituents.
The number of patients being treated has increased and the number of nurses has risen significantly. In September 1997, qualified nurses in West Hertfordshire's area numbered 1,468. In September 2000, there were 1,983. That represents a significant improvement in the health service for my constituents. There is a lot more good

news, but I am not complacent and we still have a long way to go to improve our NHS. The steps taken today to encourage more people into public services such as the national health service will, in my view, reap real benefits in the future.
Education has also benefited from significant improvements in the past thanks to the present Government and, thanks to the Budget, can enjoy great hopes for the future. Primary schools will receive between £13,000 and £63,000, and secondary schools will receive between £68,000 and £115,000. That money will go directly to schools, enabling head teachers to decide their priorities along with governors.
That is not to say that I want education authorities to be removed or undermined. I believe, however, that the Government's attempt to convey additional money directly to schools is vital, enabling priorities that can be understood by schools and by head teachers working from day to day to be met.
The flexibility involved in the use of the money is also important. As I said earlier, one of our problems in Watford, in Hertfordshire and in the south-east generally is the high cost of living, which makes it difficult to recruit and retain staff. The extra money will allow head teachers to increase new teachers' pay, over and above the national increases that the Government have announced. This is flexibility determined by local circumstances, and I expect schools in my constituency to welcome the new money.
Overall, the Budget sets out a stable and strong economy for the future. It builds on the successes of the past—of the last four years—and it enables my constituents to plan investments in the knowledge that their mortgage rates will not soar out of control. Businesses will also be able to make important investments, knowing that they can begin to recruit people with the additional skills that are being made available while ensuring that they too will receive investment.
I grew up under Conservative Governments during the 1980s and 1990s. For me, the lasting images of those years were provided by the news bulletins that I watched every night. A map would appear on the screen, with pinpoints denoting the thousands of jobs that were being lost.
Another lasting memory of those times is that of the large increases in interest rates, causing more and more people to face repossession. Young couples or families just starting out invested their money, their hopes and their dreams in their first house, only to find not much later, in the years of Conservative government, that they could not afford to maintain those dreams and hopes—that they had been dashed by Conservative policies. The Chancellor's greatest achievement has been to get rid of the boom-and-bust policies of the last Government, which says a lot about his stability, strength and competence and that of the present Administration.
One important factor is, of course, employment. My constituency has done incredibly well out of a Labour Government. Between 1997 and now, we have seen a 48 per cent. drop in unemployment. There has been a significant increase in the number of jobs: indeed, it is now difficult to fill many of the vacancies that exist in Watford. I am keen to encourage those who have retired early to consider returning to employment, as, given the number of jobs available, not enough younger people who


are currently working are able to take them up. Of course we want better opportunities for training and skills, which would enable us to meet the needs of employers in Watford and the surrounding areas.
A major industry not just in Watford but in Hertfordshire is the film industry. Film-making now accounts for 8 per cent. of Hertfordshire's gross domestic product; millions of pounds are going into the area. My constituency contains Leavesden film studios, where the Harry Potter film is currently being made. It is a great British film based on a book by a good British author. I believe that other Hertfordshire constituencies will also benefit from investment in the film industry. Steven Spielberg has been making "Band of Brothers", and successful films have been made at Elstree and other studios and locations in the county.
For the position to improve, however, we needed an assurance from the Chancellor that he would extend the tax breaks made available just three years ago. Working with the Minister for Tourism, Film and Broadcasting, who has just entered the Chamber, I was keen to ensure that we campaigned and lobbied the Chancellor on that issue, given its importance not just to my area but to the whole British film industry.
Those in the film industry, and those responsible for finding finance for British films, are—to say the least—ecstatic about the Government's policy. That is clear to me when I talk to them. This is the first Government to recognise the importance of British films, and the first Government to do something about it by making investment real. More films have come to the United Kingdom, and many more are likely to do so in the future as a result of the extension of tax breaks for the next three years. I congratulate the Chancellor and the Treasury on their introduction of a specific policy that will make a real difference not just to the British film industry, but to my constituency and the county of Hertfordshire.
This is, overall, a very good Budget. It maintains the stability that we have seen over the past four years, while increasing opportunities for investment in the health service and education. I believe that our constituents will gain real benefits from it in the coming years, and will not be conned by a Conservative Opposition who think they can offer tax cuts, investment in the public sector, a reduction in debt and all the other things that they promise when that clearly does not add up. I am sure people in Britain will recognise that when the time comes for them to judge this Government, and their ability to deliver a good, strong and stable economy.

Mr. Elfyn Llwyd: Last Thursday, that famous Welsh organ of truth, the Western Mail, quoted the Chancellor as saying:
Because employment and the economy is growing and we are saving billions of pounds in debt repayments, we can target more help on Wales' priorities.
Having read that, Plaid Cymru Members read through the Budget's detail expecting to see something about a regional economic policy. Unfortunately, we saw nothing about that. I have yet to see anything in the Budget that will cheer Wales's main industries—agriculture and manufacturing. I have no doubt that Britain's economy

is doing well, as the right hon. and learned Member for Rushcliffe (Mr. Clarke) said earlier in a very interesting speech. However, that is all the more reason for formulating and implementing a targeted regional economic policy.
The hon. Member for Watford (Ms Ward) described the situation in Hertfordshire, where I am sure various economic levers will have to be operated. None the less, in relation to the United Kingdom economy overall, Wales's economy is undeniably slipping way behind. Since new Labour took office, Wales's gross domestic product has decreased by 3 per cent. relative to that of the UK generally. Although Wales's GDP has recently grown by 0.3 per cent., compared with the overall UK GDP it has been decreasing. As for the Chancellor's huge surplus of some £23 billion, surely some of it could be used to assist the less prosperous parts of the United Kingdom, including Wales.
The Budget was a missed opportunity for Wales, which has yet to receive additional funding and full match funding for objective 1. However, before it sounds like I am whingeing too much, I should say that some of the Budget measures are most welcome, such as simplification of the VAT and tax regime for small businesses. Additionally, some red tape was cut. Although more could have been done, it will help.
Nevertheless, in recent years manufacturing industry in Wales has been hit by a series of crises. Plaid Cymru Members believe that Wales is a strong and vibrant country with plenty of talent and some of the most hard-working communities in Europe. Our nation's strengths should be appreciated and used to their full potential. There is no reason why we in Wales should not share in the type of prosperity that is apparent in the south-east of England. Although I say good luck to that region, the fact is that, despite all the efforts that are being made, Wales is not as prosperous.
I do not think that the tax incentives announced by the Chancellor to regenerate coal-mining and steel areas will help places such as Ebbw Vale and Llanwern. Although he said that he will abolish stamp duty, that will not help places such as Ebbw Vale as they do not have the capital to benefit from it.
The Chancellor also announced tax relief for cleaning up contaminated land. Such measures make me think of Corus, which has been totally oblivious to Wales's cries to reconsider ending the steel industry in Wales. A package should have been offered to Corus early in the proceedings. It is still not clear whether such a package was offered. Nevertheless, the alarm bells should have gone off 18 months ago, when it was first learned that Corus was losing £1 billion annually.
Plaid Cymru Members call on the Government to find a way of regenerating steel communities, not only in Wales but across the border. We estimate that the measures necessary to regenerate those communities would cost about £200 million. That sum is not wildly extravagant or imprudent when one considers the damage that would be done to those communities by the loss of their steel jobs. It also accords with the objective 1 benchmark of about £55,000 per new job in deprived areas.
New Labour is always keen to cite figures showing how many new jobs have been created, and—new deal or not—there are some, good success stories. New jobs have


been created, and it would be boorish of me to say that that is not a good thing. Of course it is good. However, although job creation is essential, job retention needs to be emphasised equally. In the past three years, 20,000 manufacturing jobs have been lost in Wales. Measures such as cutting employers' national insurance contributions in order to make more capital available to employers to secure jobs could act as an incentive for employers to recruit more employees.
Plaid Cymru Members have also said that incentives such as corporation tax cuts should be considered as a means of increasing investment. Although we have long been making such proposals, hitherto, the Chancellor has not accepted them.
Other hon. Members have mentioned the rural economy, which is struggling under new Labour. The agriculture sector is vital to Wales's economic development and to the sustainability of many of our rural communities. Agriculture is in the grip of the worst crisis for generations. It has been hit by disasters such as BSE—which clearly is nothing to do with the Government—and, more recently, by foot and mouth, which is also nothing to do with the Government. Nevertheless, agriculture is on its knees. It has had to battle against an unfavourable exchange rate, and it has been unable to export stock. It has also not been receiving the full value of its subsidies because of the pound-euro exchange rate.
We should not lose sight of the fact that, even before the foot and mouth crisis, 73 Welsh farming jobs were being lost each week. That is the equivalent of a major factory closing each year. Average income from farming activity in the UK was recently assessed at £4,500. The average for upland farmers—80 per cent. of whom are in Wales—was even worse, at £3,800. I dread to see the figures once the full impact of the foot and mouth outbreak is felt.
Let me make it clear that the Chancellor's announcement on agrimonetary compensation has nothing to do with the foot and mouth crisis, but is an attempt to bail out the industry after last year's losses. I call on Ministers to rethink compensation, as there must be a properly funded package. The other day, I read with some pleasure that the Agriculture Minister has said that there will be proper compensation and that the Government will consider consequential losses, outside the immediate boundaries of agriculture.
We have to realise that agriculture is not an isolated industry but encompasses the whole rural economy. Its problems affect other rural businesses and can trigger a drastic downturn in the whole rural economy. I therefore hope that Ministers will consider proper and consequential compensation both for farmers and for others who operate rural businesses.
The tourist industry, which is substantial across the United Kingdom, has probably become Wales's largest industry. It, too, has been hit by the crisis. I ask the Chancellor and his colleagues to consider and deal with that aspect of the crisis. Various hotels and villages in my constituency depend on tourism. A renowned Plas y Brenin Outward Bound centre at Capel Curig has just laid off 26 workers. That is a pretty bitter blow in a rural area. I am not blaming the Government for that; I am simply saying, "This is a crisis. Can you please act accordingly?" I hope that Ministers will consider the matter, and act urgently and in the short term to put it right.
The failure to guarantee the objective 1 match funding to which Wales is entitled is a glaring omission in the Budget. The Government say that obtaining objective 1 funding was their success, but the credit belongs to all parties. However, for the sake of argument, let us say that Labour obtained the funding. Why are the Government being so stubborn in agreeing to provide the additional funding and match funding?
The Government's delay means that the £600 million needed for match funding must now be taken out of the block grant, which is the money already set aside for running ordinary public services in Wales. For example, robbing Peter to pay Paul means that health spending in Wales will have to be reduced. The health problem in Wales is already much more serious, across the board, than it is in England. I shall not bore the House with statistics, but it is an established fact that people in Wales, by and large, are less healthy than our friends in England. That is a matter of great concern, and it derives from bad housing, socio-economic problems, the types of industry that exist in Wales, and so on.
Health spending in Wales recently received an 8.6 per cent. increase, but our colleagues in England are getting a rise of 9.3 per cent. The proportions should be the other way around, given the greater needs in Wales. Robbing the health budget to make up match funding for objective 1 funds will make the situation even worse. Had Wales received the same percentage health spending increase as England, the health service in Wales would have an additional £22.2 million.
The shortfall in education is even worse. Spending per head in England in 2000–01 is 2.3 per cent. higher than in Wales, but the gap is set to widen rapidly and will be at 9.7 per cent. by 2003–04. Over the four years of this Parliament, total education spending in Wales is £600 million less than it would have been had the same amount of money been spent per head as in England.
The hon. Member for North Tayside (Mr. Swinney) spoke of the Barnett formula, which has served Wales and Scotland for some time, although it was meant to be a temporary solution. Surely the time has come to be thinking carefully about rescheduling Barnett? We should start with a new, needs-based formula that acknowledges that there are different needs in different parts of the United Kingdom. That is long overdue. The disparities will continue unless the formula is reconsidered. There is no reason why less should be spent on education or health in Wales than in England.
The Budget gives Wales £100 million extra for education and health over three years. That is a help, but we must get matters in perspective: the £33 million a year that is being given amounts to £10 per person. I do not know how that can be expected to make great inroads into the health problems in Wales.
The Government have made the welcome promise to reduce hospital waiting lists. That was a Labour pledge in 1997, when 6 per cent. of patients in Wales had to wait longer than six months for their first outpatient appointment. The equivalent figure for this month is 714 per cent. higher. That is some increase. It will not wash for the Government to say that it has something to do with the Welsh Assembly. I have given the bare facts about a great problem which concerns us all.
The Chancellor announced a package of £200 million to aid teacher recruitment. That is welcome, but a considerable amount of money was spent on paying off


early retirees. The Government are now talking about bringing the same people back into the profession. That does not make a great deal of sense.
It would be wrong of me to deny that there were some good measures in the Budget. I differ from Conservative Members in regard to the working families tax credit, which I think has a lot going for it. The Government have given some firm indications about child care and other matters, and money has been targeted at those most in need. Only a fool would deny that, but the Budget lacks a proper, overall examination of the macro-economic problems facing Wales. Those problems are affecting agriculture, tourism and manufacturing, but the Budget contains nothing that will give any cheer to those sectors. That is a great disappointment.
Another disappointment is the lack of movement on student tuition fees. In Scotland, applications for further and higher education have risen by about 14.5 per cent., but in Wales over the same period they have fallen by 4.5 per cent. One of the reasons for that 20 per cent. difference is the fact that students are burdened with debt as they try to secure their education.
I read law as a student. I would not have qualified as a lawyer if my father had not been a retired police officer, which meant that I had a full grant and did not pay tuition fees. It is appalling that today's young people of student age must choose whether to pursue further and higher education based on whether they have the money to do so. That is a step back to Victorian days, and I am appalled that this of all Governments should be sitting on their hands and doing nothing about the problem. I believe that the Government will find that their inaction has made them grossly unpopular with people when they go to the polls in the next few months—and rightly so.
I said earlier that the Government have been following previous spending plans. Public expenditure at 38 per cent. of GDP has led to lower health and education budgets. Some bribes are now in prospect, but I want to make one final plea, on behalf of the miners fighting for compensation following the High Court case brought by the National Association of Colliery Overmen, Deputies and Shotfirers.
Even at this late stage, I hope that the Government will reconsider the immoral and unfair clawback of compensation that has already been paid to miners. The need for a rethink is underlined by the surplus of £23 billion—or whatever the true amount is—on which the Government are sitting.
All in all, although the Budget contained some good measures, it offers no cheer at all for Wales. The main structural problems remain and objective 1 funding has not been matched. Moreover, the Government are not delivering what the people of Wales are looking for. They are turning their back on Wales. Their main objective is to look after the economy of the south-east and of middle England. For them, Wales does not really count.

Mr. Bill Rammell: I am grateful for the opportunity to speak in this debate, and I broadly welcome the Budget. Like its predecessor delivered under my right hon. Friend the Chancellor of the Exchequer, the Budget demonstrates more clearly than ever that the Government have shot the Tory fox on the economy.
I apologise for the metaphor, but I use it deliberately. Since I first became politically conscious, I and everyone else in the country have been told—by the Conservative party and conservative newspapers—that Labour could not be trusted to run the economy. We were told repeatedly in the 18 years of Conservative rule that a Labour Government would lose control of the economy, that there would be a run on the pound, and that unfinanced public spending would cause interest rates to go out of control. In short, we were told that Britain would dissolve into economic chaos.
Four years have passed since the last election, and things look a little different. We have the lowest inflation for 30 years, and the lowest unemployment rate for 26 years. Real incomes are rising and the public services are receiving more investment than has been the case in my adult lifetime. In short, the Government have achieved a degree of economic stability and success that has not been achieved before.
We should not underestimate the political significance of that. It means that people who had previously shared the Labour party's values and beliefs, but who did not trust us on the economy, are now able to support us. Like many of my colleagues, I am canvassing regularly at the moment. I am finding that people who voted Conservative in 1997 because they could not trust Labour on the economy are now coming across and saying that they will vote Labour at the next general election. I believe that the Conservative party has yet to face up to the significance of that change. Perhaps it will in May or October, or whenever the election is held.
The manner in which we have managed the economy has enabled us to invest much more money in key public services. In the face of that, the Conservative party must do much better in answering the difficult questions on public spending. Whether they are talking about cuts of £8 billion or £16 billion—and there are plausible reasons for saying that, in government, they would require cuts of £16 billion—the Tories must do better in telling us where the cuts would fall.
The shadow Chancellor's earlier exchange on industrial injuries compensation was very instructive. I understood him to say that that would be an additional burden on business but that the Tories would compensate business elsewhere. The net effect of that would be zero. They could not then claim that the abolition of industrial injuries compensation would be part of their proposed £8 billion savings.

Mr. Letwin: Has the hon. Gentleman ever heard about the distinction between public expenditure and taxation? If we reduce public expenditure in one dimension and reduce taxation on business to compensate, do we not achieve a diminution of both?

Mr. Rammell: We still have to make the sums add up. Including that cut within the Conservatives' overall plans to reduce spending by £8 billion clearly demonstrates that it is not sustainable or justifiable. That would lead to having to cut the core public spending plans for schools, hospitals and the police service.

Mr. Letwin: Will the hon. Gentleman give way?

Mr. Rammell: No, I will not.
There is another more fundamental objection to the Conservatives' claim that they will match our spending on schools and hospitals. Why should we believe them? Even if their tax and spending plans were to add up, which I do not believe is the case, they had 18 years in power—the longest period of uninterrupted rule enjoyed by one party in this country in the past century—yet they never once attempted to deliver the increases for our schools and hospitals that this Government are delivering. I think that the public judge politicians not by what they say but by what they do, and by its record, the Conservative party is condemned.

Mr. Letwin: Will the hon. Gentleman give way?

Mr. Rammell: I will give way a little later.
The Budget confirms that we are prudently and cautiously giving the greatest help through the tax and benefits system to those people who need it most. Some people might call that redistribution. The hon. Member for Bury St. Edmunds (Mr. Ruffley) was clearly harking in that direction in his impassioned speech. I prefer to call it fairness. I think that the British public waned in their support for the principle of fairness for a time during the 1980s, but that they now support it again. The Institute for Fiscal Studies has recently confirmed this by saying that the reforms since 1997 have been strongly progressive and that the proportional post-tax income gain is highest for the bottom decile households. That refutes the shadow Chancellor's claim that the poorest households are hit by tax increases under this Government. The evidence shows that those households are gaining most overall, which I welcome.
I contend that because of our successful management of the economy and because we have delivered fair taxation, we are now able to deliver a significant increase in expenditure, particularly in the spending on our schools and hospitals. I was astonished to hear the shadow Chancellor talking about cuts in schools. He quoted from a letter written to him by someone who was clearly a member of the Conservative party, decrying what was happening in our schools. The Liberal Democrats expressed a similar view. My experience of talking to head teachers in primary schools in my constituency is completely the reverse. I was talking to a head teacher of a school in Harlow a couple of weeks ago, who told me that in 25 years of teaching, she had never known so much money to go to schools. That is the experience of teachers and head teachers across the primary and secondary sectors.
Let us look at the figures for capital spending. Some £686 million was spent on capital repairs of schools in 1997. Today, the expenditure figure is £2 billion and is heading towards £3 billion. That is the most substantial boost to spending on capital infrastructure in schools for more than a generation.
The same is happening in the national health service, with a third real-terms increase in spending in the coming five years. It is the biggest sustained increase in health service spending since 1948. I say that deliberately; I recently asked the House of Commons Library to produce a table on health service spending year on year since 1948 and to identify the percentage change over the previous years at 1999–2000 prices.
The table clearly shows that the projected level of sustained increase between 1999 and 2004 has not been achieved in any five-year period since the establishment

of the national health service. That is a real contrast with what went before. Under the previous Government, there were years in which they delivered significant spending increases, but that normally happened in the run-up to an election. In 1987–88 there was an increase of 4.3 per cent; in 1991–92 there was an increase of 7 per cent. However, those increases were never sustained or carried through. Two years after those increases were delivered, the increases were only 0.6 per cent. and 0.8 per cent. respectively—effectively that spending was at a standstill. Under the previous Government, there were large increases in spending in the run-up to elections, but the tap was turned off as soon as they were safely back in power.
That practice is a real contrast with what is happening under this Government. We are sustaining increased spending year on year in a way that no previous Government have done. That gives me grounds for optimism. We are beginning to get things right in the national health service unlike what happened in the past. I see that in the health service in my constituency, where there is a walk-in health centre, faster cardiac care and cancer care and shorter waiting lists. Real increases are benefiting real people.
It is worth labouring the point that the improvements are genuine. I detect a developing political and press agenda in which it is claimed that those increases are not real. The Government are accused of over-spinning the increases. In fairness, I think that in the first comprehensive spending review, we over-egged the pudding slightly. We have learned from that experience and now our claims are genuine. The polar opposite is apparent from the comments of some newspapers and political parties, which argue that an increase in spending is not real even when it is manifestly genuine.
At the weekend, The Sunday Times said that the national health service was a net loser in the Chancellor's Budget, contradicting my right hon. Friend's claims that he had given it more cash.

Mr. Letwin: Will the hon. Gentleman give way?

Mr. Rammell: No, I will conclude this part of my argument before I do.
When I read that article, I referred to the Budget Red Book for last year and this year. The Red Book shows that in 2000–01, £46.6 billion was spent on the national health service. For this year, the figure is £46.7 billion. The figure is £50.5 billion for 2002–03 and £54.5 billion for the following year. Given those figures, how any newspaper can claim that that is equivalent to a net loss for the national health service is beyond me. It does no credit to any newspaper or political party to make such a claim.

Mr. Letwin: Has the hon. Gentleman had a chance to look at the parallel figures on education and measured the actual change since the last Budget Red Book to this Red Book for education spending, as opposed to the figures presented in the relevant table in this Red Book?

Mr. Rammell: The spending figures on schools and the education budget show that over the five-year period from 1999 to 2004 we are sustaining one of the biggest increases for many years. My experience of talking to head teachers in my constituency bears that out.
A former Liberal leader, Sir David Steel, described Margaret Thatcher as knowing the price of everything and the value of nothing. The Liberal Democrat party has effectively turned that phrase on its head. It is the party that knows the electoral value of every spending pledge, but has not got the first clue of the cost of any of those pledges and is certainly not straight with people about that cost and who would have to pay.
The starting point for the Liberal Democrats is similar to that of The Sunday Times: it is to claim falsely that the increased funding for the national health service is not happening. In their alternative Budget for 2000, they claimed that NHS spending was increasing by only 3.7 per cent., which was only the average rise for the past 45 years and that there was not therefore a significant improvement. Again, the Library table that I mentioned shows that that is not the case. Over this Parliament, we are looking at a 5.4 per cent. real-terms increase, which compares very favourably with the average and is the biggest sustained increase in the 48-year history of the NHS.
My greatest concern with the Liberal Democrats is the way in which they recycle a limited and insubstantial number of tax increases and then claim that they would fund an ever-burgeoning list of spending pledges. We have seen that today. A detailed reading of the Liberal Democrats' alternative Budget is instructive. Last year, they said that they would introduce a top rate of tax for those with incomes of more than £100,000 of 50p in the pound, which would pay for reducing the 10p rate to zero, which would be a significant boost to people on low incomes. In this year's alternative Budget, we find that the 50p tax rate is to fund extra improvements in the NHS. One would imagine that, given that change had taken place, the commitment on changing the 10p rate to zero would have been removed, but no, the only difference is that we are not told where the money will come from to fund that proposal.
We see that sort of practice time and again. A limited tax increase to fund something in one year funds something else the following year, but the spending commitment of the previous year is still trumpeted as official Liberal Democrat policy. That is dishonest politics of the worst kind. It is not being straight with people about the cost of spending pledges.
One sees it again if one looks at the detail of the Liberal Democrat alternative Budget on long-term care. We are explicitly told that, were the Liberal Democrats to come to power, they would pay for all long-term personal care costs. There are no qualifications and no time scale is given. The problem is that the cost of that commitment is £1 billion but the ready reckoner table at the back of the alternative Budget contains only a commitment to increase funding by £400 million in the first year, which is meant to pay not only for long-term care but for a host of other commitments on the NHS.
There is a word to describe that sort of politics, but I know that I am not allowed to use it in this Chamber. However, if the Liberal Democrats' alternative Budget were a pension policy, they would be on the point of having to pay massive compensation to people because what one paid for is certainly not what one would get under a Liberal Democrat Government.
I have warmly welcomed the significant measures that will make a difference to my constituents and to people elsewhere, but I have one area of concern. I have made it clear that the increases in spending on hospitals are significant and of an order that we have not seen before. However, in Harlow and elsewhere in the south-east, the huge challenge that we face is that of recruitment to the key public services.
My constituency is typical of the south-east. We have effective full employment—unemployment is only about 2 per cent.—and a typical two-up, two-down, house costs £80,000 or £90,000. Those two factors are causing us real problems in recruiting teachers, nurses and the police. I welcome the fact that the Government have given us significant help with recruitment to teaching and the police, but when they introduced the cost of living allowance for nurses of £1,000 a year, it was granted to London, Hertfordshire and Cambridgeshire—it missed out Essex, which is a genuine concern.
I recently heard a story about someone who met 10 general nurses in my constituency who were in their third year of training, only four of whom planned to work locally at the end of their studies. The others will either go north because of the lower housing costs or will move to London because of the enticement of inner London weighting and the additional £1,000 a year. I end with a plea to the Secretary of State for Health, who has said that he is reconsidering the allowance. A mistake was made by missing out Essex and I hope that that can be rectified.
This is a significant Budget that will benefit my constituents as never before.

Sir Peter Emery: First, I must explain that I had to leave the Chamber for a little more than an hour in the middle of the debate to attend the Select Committee on Foreign Affairs and deal with a matter that produced a vote, which illustrates the pressure under which some of us are placed when we have to be in two places at once, as many Ministers will no doubt understand.
The date of 8 October 1959 is not one that is in memory of most of my colleagues here, but it was the day that I fulfilled an ambition by becoming a Member of Parliament, after fighting a general election in Poplar in 1951 and fighting Geoffrey de Freitas in Lincoln in 1955. It seems unbelievable that my first general election fight was 50 years ago. It seems like only yesterday, but I do not think that many people will believe me.
I will not try to produce a great analysis of the Budget—my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke) did so most excellently. I think that, in time, history will designate the Budget to a back burner, or even to the waste paper basket. It was marvellous spin but, on analysis, little has been given away to the benefit of my constituents. Therefore, I do not want to make a broad-brush speech—there are too many of those and they do not get far. In my last speech on the Budget, I pass on to the House the advice that I was always given: take three subjects, deal only with them and nothing more and they might be remembered. That is what I shall try to do.
First, it amazes me that during the whole of the Chancellor's speech of just under an hour, with the countryside reeling and farming in a desperate plight


because of the foot and mouth epidemic, the only words that we heard from the right hon. Gentleman on that tragic situation were about agrimonetary compensation, which was in the pipeline long before the outbreak of the disease. Even in this Budget debate, I stress that the Government must take the situation much more seriously than they do at present. Since yesterday's report, a further 24 cases have been confirmed, bringing the total—at 3 o'clock this afternoon—to 180 cases. More than 985 movement restrictions have been imposed throughout the country, covering 25 counties in England and Wales.
The Government must look at consequential compensation. It is imperative that they consider the consequential damage of the epidemic across the board. Farmers who have had to slaughter their cattle, sheep or pigs are rightly compensated—we all understand that—but other people in the countryside equally face financial ruin. A haulier in my constituency told me that during the past three weeks his takings were only 10 per cent. of what they had been during the same three-week period a year ago.
Farmers who cannot move their beasts to market do not have to have them destroyed, but are unable to obtain the proper value for them. They face desperate financial problems—as do hoteliers and tourism. A person who runs a tourist park in my constituency told me that he dreads answering the telephone because it will be yet another cancellation. He said that the park was full about a month ago, but that almost no one will be going there at Easter.
The Government must take that into account when they consider the overall effect of the epidemic. It affects not only those people whose animals have to be destroyed, but those for whom the consequential effect is disastrous.
Can the financial action for which I ask be taken? Let us study the Red Book. Under income, the total figure is £399 billion: £61 billion from VAT; £38 billion from corporation tax; £37 billion from excise duty; £63 billion from national insurance; £104 billion from income tax; £15 billion from council tax; £94 billion from all other income; and £17 billion from the business rate. I have listed the figures so that hon. Members can see how the £399 billion is made up.
On spending, the amounts are £109 billion on social services; £18 billion on housing and the environment; £23 billion on law and order; £16 billion on industry and agriculture; £23 billion on debt repayment interest; £24 billion on defence; £50 billion on education; £10 billion on transport; £59 billion on the national health service; and about £52 billion on other matters. The total is £394 billion.
There is a difference of £5 billion between income and spending. I have the right to stand here tonight and demand that the Government use some of that money to help constituents—not only mine in Devon, but those in the north of the country where matters are just as bad. Throughout 25 counties, there are people who deserve some assistance from the Government.
Such compensation may never have been paid before, but the Government can no longer use that defence. They claim to be a Government who rethink everything. The tragedy that we face in the countryside demands a rethink from the Government; they must take positive action to provide compensation for people who face the bitter prospect of bankruptcy.
Secondly, I want to consider the help that should be given to elderly people who go into homes or hospitals during the latter years of their life. In my constituency—in Budleigh Salterton, Sidmouth and Exmouth—a vast number of retired people who are coming to the end of their lives are entering care homes and being looked after well. The difficulty is that the costs of those homes are constantly rising, and many people who enter them, believing that they can meet the costs, find themselves only a short time later in the frightening position of being in real hardship and beset by great worry about the ever-growing cost of sustaining themselves.
If those people were thrown out and had to be looked after by the state, the costs would be much greater than they would be if the Government gave them some help in meeting their costs. As a matter of humanity, any Government must take the matter seriously and adopt a modern approach. Unfortunately, such an approach is not being taken at present.
Thirdly, I want to ask why there was no mention of the euro—one of the major sources of worry and contention—in the Budget. By this time next year, there will be no French francs, German deutschmarks or Italian lire. Thirteen European currencies will have disappeared and will have been replaced by a single currency: the euro. Tourists will increasingly want to bring that currency into this country and use it, and in this country there will be increasing demand for commercial and industrial aspects of trade to be settled in the euro.
How do the Government envisage those changes affecting their budgetary position? What consideration are they giving to the matter? A number of us believe that it is essential that if, taking into account the economic position, it is seen to be to the great benefit of Britain to enter the euro, no political party should desist from taking that action. What is that great benefit? That factor must be analysed, and I believe that the Government have to start to bring that analysis before the country as a whole. I believe that it is necessary for us to have a clear understanding—which I do not believe exists now—of what the advantages can be and what some of the disadvantages might be of the euro in operation.
People have been speaking about the euro theoretically until now, but by this time next year it will be not theory but a practicality, and it is a practicality that cannot be swept under the carpet. It is a practicality that the Government and the Opposition will have to face in different circumstances from those that exist now, in 12 and 15 months' time. The Government must start to explain exactly what their view will be when they begin to notice that effect, and what effect that will have on their budgetary position, because I would bet my bottom dollar that the euro will have a considerable effect on that position, which no one is considering now.
I could continue for some time, but I believe that a number of hon. Members wish to speak and that if I sat down it would be welcomed more than if I continued. Thank you very much for calling me, Madam Deputy Speaker.

Ms Margaret Moran: We have heard much from Conservative Members about the inadequacy of spending on the national health service, among other services, but the words that have stuck with me are those


on the no-nonsense NHS plans that we heard from my right hon. Friend the Secretary of State for Health this afternoon. They are no-nonsense plans because the Government recognise the need to recruit and retain nurses and essential health staff in areas such as mine in Luton.
Last week, I visited Luton and Dunstable hospital in my constituency and saw for myself the effects of the Government's investment in the health service. During the next few years, more than £3 million will be invested in our hospital's infrastructure, providing a new accident and emergency department; and new wards and other facilities, including those for cancer care, are opening. We certainly did not see that under the previous Government. I commend the health staff, who work so hard and whom we need to retain in our hospitals so as to continue to improve on the achievements so far.
On Thursday, I will be work shadowing a GP in my constituency. I shall do so because I am aware of the intense pressures that GPs are under in parts of our country. In my constituency, there are often far too few GPs in the areas of greatest deprivation, and they are under intense pressure. In an area that I shall visit on Thursday, the GPs tackle the ill health that is a consequence of the multiple deprivation in Bury Park, where housing is poor. There are overcrowding and health problems, such as diabetes, heart disease and cancer, and the unemployment rate for many Pakistani and Bangladeshi young people is four times the national average.
All those problems are linked and must be tackled if we are truly to give opportunities to all. That is why I welcome not only today's announcements on recruiting and retaining health staff and providing bonuses to retain our GPs, but the other measures in the Budget that address the opportunities for employment, good housing and regeneration. They are part of the bigger picture that makes up the problem of poor health, which must be addressed if we are to tackle the health and other inequalities that we experience in our constituencies.
I particularly welcome the health action zone, which the Government have given to my constituency. It will spend more than £3 million in the next few years to tackle those health inequalities. We are looking at the big picture—what we call the joined-up approach—and spending not only on health, but on regeneration and on opportunities and employment prospects for our communities. The Government are doing the right thing for constituencies such as mine.
I am absolutely astonished about the shadow Chancellor's announcement that the Conservative party intend to match the Government's health spending, by means which simply do not add up, so where would the cuts fall? They would fall on those measures that contribute to creating better health and reducing health inequalities. The Conservative party would slash our regeneration and housing investment funds. In other words, that is another example of the short-termism that we experienced during the 18 years of the previous Tory Government.
The previous Government slashed and burned their way through housing investment, which has been responsible for unprecedented housing need and homelessness. All the

research shows that their policies have been responsible for creating greater health inequalities because health, housing and job opportunities go together. That is why I find the shadow Chancellor's words incomprehensible.
The Conservative party says that it intends to maintain health spending, while cutting the essential services that contribute to the maintenance of good health. That is why I particularly welcome the Chancellor's comments, which were less discussed, that he intends to ensure that, under the Budget, we regenerate areas of least opportunity and tackle the causes of unemployment and low economic activity.
Those measures are particularly important in my constituency, which is still reeling from the announcement of the Vauxhall closure. I am pleased that there will not now be any compulsory redundancies and that there is a greater prospect that a replacement vehicle will ensure future employment in vehicle manufacturing in my constituency. Government support and their promise of cash has enabled us to make that move. That is in stark contrast to the approach of the member of the Conservative party who said that 3 million unemployed was a price worth paying.
This Government put their money where their mouth is. They have already put money into ensuring that those who lose their jobs as a result of supply chain job losses receive the support, the job opportunities and the reskilling to which the Government believe they are entitled. I pay tribute to the shop stewards at Vauxhall who have worked so hard in partnership with Members of Parliament, Members of the European Parliament and the council to get the best deal for the workers at the plant.
The shock announcement of the Vauxhall closure did not reflect what has been happening in Luton. In fact, Luton has been looking up, although it is difficult to see that through some of the recent announcements. More jobs are coming into the constituency through our business park at Capability Green where Astra Zeneca is about to move in. The airport is expanding, and 5,000 extra jobs could be created in a new business park if we obtain from the Treasury, as we hope we will, funding for the widening of the east Luton corridor. I hope that the Treasury recognises the employment and regeneration opportunities that that development might bring at a time when we need it in Luton.
Let us examine how far Luton has come. In the late 1980s, we had the ignominious reputation of being the negative equity capital of the country. Boom and bust and the Tory years hit Luton hard. Millions of families across the country lost their homes, and repossessions were rife. Interest rates hit 15 per cent., causing havoc for hard-working Luton families. However, I am pleased that, as a result of this and previous Budgets, things are looking up for Luton. That is because the Government have taken tough decisions and not chosen the easy way out, such as the everlasting 1p of the Liberals or the boom-and-bust economics to which the Tories would return. Lutonians now benefit from the fact that they have low interest rates and a stable economy. Mortgage misery is, by and large, a thing of the past for Lutonians.
Under the 18 years of the previous Government, my constituents were struggling against record unemployment, they were struggling to keep their homes and they were struggling against 22 Tory tax rises and worsening public services. They literally paid the price


of Tory failure. For every £1 that was spent under Tory economic mismanagement of the economy, 42p was spent on the cost of despair—the cost of dole, debt and borrowing. Now things have been turned around: the economy is stable, debt is being repaid at unprecedented levels, and youth unemployment is down in my constituency by an amazing 83 per cent. We now have the equivalent of 84p in the pound to invest in our schools and health service.
I go around my constituency frequently and I have visited all its schools twice in the past year. Everywhere I go, I see new classrooms, new information technology suites and new libraries. My constituency is benefiting from reduced class sizes, and mums tell me that they make a real difference to standards.

Mr. Hayes: When the hon. Lady visits schools, will she point out that spending on education as a percentage of gross domestic product has fallen under this Government, that secondary school class sizes are rising according to Government figures and that, according to House of Commons Library statistics, in early years education, more children are now being taught in classes of more than 30 pupils than was the case under the previous Conservative Government?

Ms Moran: My mums tell me that there are more nursery and early years places in my constituency than there ever have been before. An extra £120 extra is now spent in the classroom per pupil in my constituency.
More money is being made available than ever before for regeneration in deprived parts of my constituency, such as Ramridge and Ashcroft in the centre of Luton. We tried to calculate the amount, and worked out that we are spending at least £21 million on regeneration this year alone, through the single regeneration budget, sports action zones and health action zones. On top of that, the Government have successfully argued for objective 2 and assisted area status, so there are more job and training opportunities than ever before. As I said, the Government put their money where their mouth is.
We recognise that there is much more to do, particularly if we are to create job opportunities for everyone who needs them. One of the problems in my constituency is that business start-up rates are among the lowest in the country, while business failure rates are among the highest. Despite the fact that Luton council's venture fund lends money to start-ups that have difficulty getting traditional funding, we still have a major problem in ensuring that small business start- ups are sustainable and can grow in the long term.
Given the legacy of the 1980s—the Tory dark days—when people lost their homes and the future was uncertain, many traditional lenders are wary of lending money to some of my constituents. That is why I particularly welcome the Budget's proposed tax incentive for community investment. The Chancellor has rightly identified the fact that business creation is often lowest in our most disadvantaged communities, and Luton is a case in point. We need to tackle the causes of low economic activity and unemployment, so we need new financial incentives. Instead of community enterprises being totally reliant on filling in forms to apply for grants—in other words, handouts—we must ensure that we have hand-ups for start-ups and small and growing businesses. That is where the tax incentive comes in.
By opening up economic and business opportunities to our most disadvantaged communities, we can unlock their potential, as well as flows of private finance which would not ordinarily find their way into such areas. I think of Bury Park, one of the most deprived areas in Luton, as I said earlier, which suffers from low employment and poor housing and has an urgent need for regeneration. I hope that the tax incentive will encourage more social and ethical investment opportunities because some investors have been very slow indeed to recognise the potential of some of our deprived communities.
Community organisations in my area, such as the Bangladeshi youth league, traditionally develop the next generation of community leaders. They could venture forth and develop the next generation of job and wealth creators in the community, ploughing the investment back into the community and helping to regenerate their own areas to a much larger extent than they have the opportunity to do now. Small local enterprises could establish themselves in areas where unemployment and dereliction would otherwise be the norm. The case for the tax credit is powerful—it could fill the gap in the market between finance for regeneration and community development through grants and private finance.
The tax credit also has the potential to deal with the effects of the years of Tory disinvestment in housing. The same areas that need business start-ups need investment in housing. We inherited a £19 billion backlog of disrepair from the previous Government. There is also an acute housing crisis, which is reflected in the fact that 9.3 per cent. of my constituents are in housing need, yet for every homeless person there are seven empty private properties. Investment is needed to bring them back into use. If we extended the tax credit to property, ensuring that debt and equity are taken into account, it could usefully regenerate the physical infrastructure as well as providing job opportunities.
In my former life, I was chief executive of a housing association. The tax credit would have been extraordinarily useful in producing the comprehensive regeneration that we wanted. We did not want to tackle just problems of bricks and mortar, but problems within the community and of employment as well. I commend the Budget and that initiative in particular to the House. They will bring real benefits, especially to mortgage holders in Luton, who will no longer have to wear the label of living in the mortgage misery capital of the country. To my right hon. Friend, whose policies have created mortgage stability, my constituents say, "Cheers."

Mr. John Butterfill: As several other hon. Members want to speak, I shall confine my remarks to one subject and be brief.
I am concerned about the impact that the Government's fiscal and monetary policies have had on pensions and their provision. However, I applaud the Chancellor for accepting most of the recommendations that Sir Paul Myners recently made in his excellent review of institutional investment, many of which relate to the provisions of the Pensions Act 1995. I was a critic of many aspects of that legislation, although it tried manfully to deal with the problems that arose out of the Maxwell pension scandal. It imposed a great deal of useful regulations on the pensions industry, but it also created


problems. Most notably, it did not deal with custody, which Myners specifically addresses. Will the recommendations on custody be fully implemented, because only independent custody can prevent another Maxwell scandal from taking place?
The Budget does not deal with the costs that the 1995 Act imposed on providers of company pension schemes. The regulatory burden has driven many people away from the provision of defined benefit schemes and into defined contribution schemes, to the detriment of the public. It will be interesting to know whether the Treasury has proposals to deal with the problem of the regulatory burden, which acts against the national interest.
I applaud the abolition of the minimum funding requirement. I always opposed it. I said in 1995 that it would distort investment decisions and diminish the value of funds because it would lead to more cautious investment. It also has the perverse effect of increasing the purchase of gilts, thereby depressing the yield on annuities. There was a double whammy for pensioners. First, the value of their funds was diminished and, secondly, the fund would buy less of an annuity on maturity than would otherwise have been the case. To the extent that the Chancellor has accepted that problem, I welcome what he has done to address it.
However, other policies have made pension funds and people with private pensions considerably worse off. Despite the fact that the value of pension funds was diminishing, because of the factors that I have outlined, the Chancellor introduced in a previous Budget the £5 billion a year tax on pensions. In response to questions about this Budget, he said that the total value of pension funds has increased. It has, but their liabilities have increased even more, so that what will be bought in terms of pension has less value. There has been a significant net reduction in the value to pensioners as a result of that policy.
The fact that the Chancellor, highly commendably, has made substantial repayments of the national debt has also affected pensions dramatically. Those repayments, amounting to £34 billion, do not all result from his prudence; they result largely from the sale of telecoms licences, which accounts for £23 billion alone, and other privatisation receipts. I applaud the repayment of debt, but we must look at its effect on pensions that will become in-payment. It will reduce dramatically the volume of gilts available on the market at a time when Government policies are encouraging their greater purchase. That will drive gilt deals down even further and annuities will yield less and less.
We are creating a black hole for annuities; more of them have to be purchased to produce less and less income. Because they produce less income, even more of them have to purchased. Until the Government tackle the annuities problem, we will not get over the difficulties that will face all pensioners who save for their retirement.
That is a very severe problem indeed. I have introduced a private Member's Bill, the Pension Annuities (Amendment) Bill, which we tried to debate last Friday. Sadly, it was blocked by the Government Whip, but I hope to have further discussion with the Economic Secretary on the subject. It is interesting that her officials are telling her that the cost of an annuity equal to the

minimum income guarantee, if one disregards the tax-free lump sum, is about £72,000. The Government do not realise that that £72,000 is related entirely to the yield on gilts. They are constantly increasing that cost through their action. If the policy on annuities were reversed and another form of investment, not based on gilts, were accepted, the cost of replacing the minimum income guarantee would be reduced dramatically.
The Government have double standards on the minimum income guarantee. Although they say that it will cost £72,000 to replace it for someone with a private pension, a pensioner wanting to claim it is excluded from doing so if he has a mere £12,000 of savings. One cannot equate easily equate £12,000 and £72,000. We are faced with a Government who discourage people from becoming independent by saving for their retirement and ceasing to be a burden on the state. At the same time, they rely on means-tested benefits, which are ever more complex and difficult to claim and which create a dependency society. The minimum income guarantee encourages people not to save because, as the Government's own figures demonstrate, under the present rules, it is difficult for most pensioners to save enough money to avoid it. People who buy stakeholder pensions, as urged by the Government, will therefore be led into a colossal mis-selling of pensions, because nearly all of them would be better off not buying them and relying on the minimum income guarantee.
The remedy is in the hands of the Treasury. If it gets rid of its obsession with annuities, which are an outdated investment—no one was advised to buy them—it could solve the problem. Annuities are such a bad investment that the actuarial profession is saying that most people would be better off buying the underlying gilts that are being bought by insurance companies. They would have a better income and their capital would not be lost on their death, as they would avoid the position of having nothing left to pass on to future generations. The Treasury and Inland Revenue would do better because they would pick up additional inheritance tax on the way.

Mr. Desmond Browne: I listened carefully to the hon. Member for Bournemouth, West (Mr. Butterfill), who speaks with clarity about a difficult subject. Every time I hear him, I learn a little more, and some day perhaps I will understand the complexity of pensions. I sense that some day those on the Treasury Bench will be receptive to the issue that he rightly persists in raising.
I, too, shall be brief. Like the right hon. Member for East Devon (Sir P. Emery), I tender my apologies to right hon. and hon. Members for my absence during the bulk of the debate. I was in Standing Committee B, where we were considering the International Development Bill under the chairmanship of the hon. Member for Bournemouth, West.
Replying to the Budget statement of my right hon. Friend the Chancellor, the Leader of the Opposition spoke for 34 minutes. During the whole of that time, he never mentioned the word "poverty" once, and he made no reference to the eradication of it. Perhaps that is hardly surprising, as the subject does not lend itself to stand-up comedy or pre-scripted jokes. However, the subject is important to many of my constituents.
On 12 July 1999 the Select Committee on Scottish Affairs published its report entitled "Poverty in Scotland". To measure the extent of poverty in Scotland, the Committee drew on a statistical base for the period to the end of 1996, and concluded in paragraph 22:
Broadly speaking 25 per cent. of Scottish households are in poverty—that is, living on incomes below half of the average, which is a slightly higher figure than the UK as a whole. This represents a significant increase since 1979.
That was some understatement.
The Committee went on to report:
One third of children are in or at risk of poverty. Whilst lone parents form a small percentage of the total numbers in poverty, both they and their children are highly likely to live in poverty. Two thirds of lone parents are in poverty. Twenty-nine per cent. of Scottish pensioners survive on incomes of half the UK average. Overall, women are the biggest group in poverty. Elderly women are particularly vulnerable.
The seriousness of the problem of child poverty in the UK at that time was best illustrated by comparing its position to that of other countries in the European Union. Although by no means the poorest country, we had the highest level of child poverty in Europe.
I understand that the factors that cause and sustain poverty are complex, but in my constituency, Kilmarnock and Loudoun, over the period from 1979 to 1997, we had them all. We witnessed a decline in our industrial and manufacturing base and a trend towards part-time, flexible and short-term working. Industrial and economic change brought high unemployment, low pay and poverty in work. Conservative Government priorities between 1979 and 1997 increased that poverty and inequality.
It is with great relief that my constituents see that they now have a Government who not only talk about poverty, but set targets for tackling it. Not only are they committed to the eradication of poverty, but they have set indicators of progress towards that target and policies designed to improve the incomes of the poorest pensioners, the poorest families and the poorest children.
I have the regard for the right hon. Member for East Devon that his seniority and position in the House demand, and I listened carefully to his remarks. Like him, because I represent a constituency that is substantially rural and has many farmers in it, too, hope that the Government will rethink the previous policy on consequential losses arising from foot and mouth disease. However, the right hon. Gentleman will forgive me if it sticks in my throat a little to hear a call based on morality, allegedly, coming from those on the Conservative Benches, when throughout the period during which they were in charge of the country's economy, the Conservatives did nothing, while consequences much worse than those now faced by the farming community in my constituency were faced by the industrial and town communities of my constituency.
I should like to speak briefly about some of the micro-economic announcements contained in the Budget statement. I believe that they will build on the steps that the Government have already taken to deal with the consequences of Tory policy. The omission of any measure from my comments should not be taken as a lack of support for it. Like my hon. Friends, I welcome the Budget, which will greatly improve the lot of almost 10,000 working families in my constituency. I represent a community that is among those with the highest unemployment in the UK. On any measure, whether

claimant count, the labour force survey or International Labour Organisation figures, the community in the East Ayrshire local authority area is one of the top 20 in the country in terms of unemployment.
Opposition Members groan and jeer in unison when my right hon. Friend the Chancellor or other Labour Members describe the macro-economic objective of trying to avoid a return to boom and bust. Every time I hear them do so, I wonder whether they still fail to understand the need for a stable economic platform to establish policies that deal with the concerns and problems of communities such as that which I represent, or whether they still do not care. Whichever is the case, it is none the less an indictment of them.
It is to the Government's credit that they established that platform of stability. Despite the difficult decisions that had to be made, unemployment in my constituency has dropped significantly—by about 26 per cent. overall—and long-term youth unemployment has fallen by more than 60 per cent. The most interesting thing is that it never dropped at all—never mind significantly—in any of the boom periods that occurred under the previous Government. Of course, there was no new deal when they were in power. [Interruption.] The right hon. Member for Kensington and Chelsea (Mr. Portillo) guffaws, but those who have been among the long-term unemployed in my constituency, perhaps as youths, have lived through booms before. Governments of whom he was a member were responsible for managing those booms, but they never delivered jobs. In the current growth period, with the help of the new deal, 60 per cent. of unemployed youths in my constituency have found work. He can guffaw if he likes, but those who have benefited from the new deal will recognise his attitude.
Despite the success of the new deal, there is still persistent unemployment in East Ayrshire. If that unemployment, including the continuing redundancies in manufacturing, are not dealt with, my community will be left behind while others move on towards the goal of full employment. I share that goal, which was last achieved in this country the 1950s. The news on the jobs front is not, however, entirely bleak. Since I was elected to Parliament, more than 1,200 new jobs have been attracted into my constituency. About 80 per cent. of those jobs are in call centres, while the rest has been produced by attracting further inward investment. All of them are a tribute to the partnership between local and national Government agencies. The new M77, which is due to be completed in 2005, will link Ayrshire with the national motorway network and enhance the work that has already begun. The Budget contains specific provisions that could have been framed for constituencies such as mine. Indeed, I hope that they were.
Like my hon. Friend the Member for Luton, South (Ms Moran), I welcome the provisions that are designed for regeneration. In particular, I welcome those that aim to cut the cost of small business borrowing. I welcome the new community investment tax credit, the community development venture capital fund and the accelerated tax credits that are designed to encourage brownfield development. Developers in my constituency have already contacted me about those credits, as they are interested in developing sites that were previously unattractive. I welcome also the abolition of stamp duties on all property transactions in the most deprived and disadvantaged urban areas. God knows, enough wards in my constituency


should qualify. Those measures, which all seek to regenerate our poorest communities, could all have been designed with towns such as those in my constituency in mind.
In recognition that East Ayrshire is a localised pocket of high unemployment and deprivation, it was chosen as an area for the job action team pilot. I pay tribute to Jim Burns, the manager of the employment services pilot scheme, his staff and their partners for embracing so enthusiastically and imaginatively the opportunity provided by the pilot. In the first six months of their work, they have managed to identify job opportunities and to match them with long-term unemployed people so successfully that they have found work for 20 per cent. of those registered for jobseeker' s allowance in the pilot area. In addition, they have helped a number of other jobseekers into work. They have shown that targeting resources works, and they welcome the extension of the action team funding for the whole of the spending review period.
A serious problem exists in my constituency in terms of opportunities for work. Throughout Scotland thousands of unemployed people are unable to cope with the demands of training or to hold down jobs because of drug problems. The announcement of a £40 million, three-year project to address that problem will bring welcome additional help. However, in our poorest communities a longer-standing, and just as devastating, problem has blighted the job prospects of countless thousands for generations. That is the problem associated with alcohol abuse. I make a simple appeal to my right hon. Friend the Chancellor to consider the extension of the rightly lauded drugs initiative to those with alcohol misuse problems.
I welcome the Budget. It contains welcome provisions to support families, women and children, and strikes a proper balance between economic stability and social justice. It has been warmly welcomed by the thousands of families in my constituency who will benefit from its provisions, and by many others. It also contains great promise that policies have at last been marshalled that will begin to address the persistent problems that have kept many of my constituents in poverty for far too long.

Rev. Martin Smyth: Like the hon. Member for Kilmarnock and Loudoun (Mr. Browne), I represent many small businesses. Any help for small businesses is to be welcomed at the moment.
In the midst of all the benefits that have been announced for pensioners, I must make a plea for a group that has consistently been overlooked. I received a telephone call recently from someone who is not a constituent of mine—his elected representative stood for Parliament but will not sit in Parliament on the same terms as the rest of us. His name is Jim Steele and he is 83. He phoned me to say that, when he became 80, he received an increase of 25p a week in his pension. Despite all the other increases that have been announced, nothing has happened to that 25p a week. It is an insult to continue to pay only 25p a week to a person over 80, so many years after that increase was made to help those in old age.
I welcome the proposals concerning climate change that will allow the expansion of the gas industry in Northern Ireland. Ultimately, I believe that that will help the nation

as a whole to reach the Kyoto targets. I welcome, on behalf of my colleagues, the news on the additional spending on health, staffing, equipment and renovation. We also approve of the increased long-termism in many of the spending announcements. However, like others in the House and throughout the nation, we do not take it for granted that those announcements are intended only to help us now. The Government might also have another aim in view: that of winning an election in five years' time, as well as in the immediate future.
When one reads the seemingly impressive figures published in the Budget—such as the total of £1 billion for the NHS over three years, including a cash handout of up to £1 million for each of the 200 or so acute care hospitals, and £135 million for the new recruiting drive—one must be cautious. We ask for consideration to be given to the impact of such increases. What impact will the additional funding, coupled with the other spending increases due to take place next month, have on the day-to-day problems experienced by the health service?
There is a staff shortage in the health service. Last year, the Secretary of State announced plans to recruit 20,000 nurses and 2,000 general practitioners by 2005. Naturally, they were roundly welcomed. That is true of the Chancellor's plans for a new £135 million fund to recruit front-line staff, but it must be ensured that additional resources effectively target and eliminate the sources of staff shortage, which I touched on in Question Time.
Retaining staff is just as important, if not more so, than attracting young people to the health service. The value of work experience must never be underestimated, nor must it be forgotten that we do not have enough training places for prospective nurses or GPs. There is a restriction in place and we must re-examine it.
To retain nurses, fairer salaries must be paid. In Northern Ireland and throughout the United Kingdom, people are asking why police officers start on £17,000 a year whereas nurses get much less. Many do not earn the overtime that some police officers receive, which is why they take on agency employment outside normal working hours. Nurses must be paid fair wages commensurate with those paid to workers of equivalent skill.
I reserve judgment on the establishment of the capital renewal fund, which will be paid directly to GPs, although I welcome any plans to address the shortage of family doctors. Additional funding for acute care hospitals over the next three years must be welcome, although I have residual concerns about how effectively hospital trusts will transfer such funding to improved equipment and improved hospital buildings.
Departing from the domestic health service for a moment, let me put on record my pleasure that the Government have introduced a new tax credit to encourage British companies to play a fuller role in global disease relief. The measure will promote the development of new drugs and facilitate their widespread distribution. We should enhance both in acknowledgement of the damaging effect of disease on the third world.
I want to mention health funding in regions in which responsibility is devolved. I was not altogether amused to discover last week that the Secretaries of State for Scotland and for Wales would be making announcements in the next few weeks. Northern Ireland seems to have been put into semi-orbit and, as the regionalisation of the nation increases, we must be careful not to allow any part


to become semi-detached. I hope that the Northern Ireland Assembly puts health at the top of its agenda by allocating a large proportion of the additional resources resulting from the Budget to hospitals to ensure that the standard of health care in Northern Ireland matches, if not betters, that in the rest of the United Kingdom.
When funds were reallocated recently, £10 million that had not been used was discovered in the health pot, even though people throughout Northern Ireland were crying out for better surgery and better equipment and operations were not being carried out. What is going on with the management of our health resources? I believe that sometimes we waste them.
We need not just greater funding, but more prudent funding and more prudent spending of financial resources. Health service morale is at an all-time low. The additional funding may halt the fall in morale, if it has not already hit rock bottom, but it will take further funding to rebuild both morale and public confidence in the health service.
In that context, the hon. Member for North Tayside (Mr. Swinney) kept referring to percentages, but they are not a good guide. If I understand my maths, 10 per cent. of 1 million is 100,000 and 50 per cent. of 100,000 is 50,000. We need hard figures so that we can make comparisons and draw valid conclusions.

Mr. Oliver Letwin: Today's debate takes place against the sombre background of foot and mouth disease, as was mentioned by my right hon. Friend the Member for East Devon (Sir P. Emery). As he and others pointed out, however, there is nothing in the Budget about it. I am especially surprised—given that the Budget will have been prepared somewhat in advance—that we have heard nothing from Ministers about the reallocation of some of the £1 billion underspend that they pushed into the subsequent year to fund compensation payments.

Mr. Gordon Brown: More public spending.

Mr. Letwin: Not more public spending; reallocated public spending. The Chancellor could not spend that money last year: try as he might, he could not get Whitehall to spend it. Now he is pushing it into the next year, and not looking at the emergency that faces the country.

Mr. Brown: More spending.

Mr. Letwin: No, it does not mean more spending this year. It means the same amount of spending this year, reallocated. It would be good if the Chancellor were able to do what I believe he is fond of accusing us of not being able to do, and could do his sums.
As usual, we are confronted by a Budget which, as my right hon. Friend the Member for Kensington and Chelsea (Mr. Portillo) pointed out, contains a good deal more spin than substance. The hon. Member for Harlow (Mr. Rammell)—who, alas, has had to leave the Chamber, but was courteous enough to let us know in advance—made an interesting speech, but fell into a huge heffalump trap. I am in the fortunate position of being able to reveal the results of a little further investigation. After all, such discoveries are made 24 hours by 24 hours as we disinter the astonishing palimpsest of the Red Book.
We now find that the extra money for education, which we already knew had been reduced from £1 billion to £400 million, is a conjuring trick in itself, as it is based on a comparison with the pre-Budget report. If we refer to the Red Book relating to the last Budget, we find that the amount turns out to be £200 million. I agree that the Chancellor is a magician, but making £200 million into £1 billion is certainly a magic trick even by his standards.
Then there are the dogs that did not bark. My hon. Friend the Member for Bournemouth, West (Mr. Butterfill) rightly made another impassioned plea for a change in the annuity rule. There was nothing about that in the Budget, although the Chancellor prided himself hugely on having vastly worsened the annuities situation by repaying a huge amount of the national debt.
Although the Chancellor made no announcement of a rise in corporation tax, it will rise by £5.7 billion next year after four years of failure to index the various thresholds. I could go on, referring to the national insurance changes, the company car tax changes and all sorts of other things that we never heard about—as is, I think, widely acknowledged now.
My right hon. Friend the Member for Kensington and Chelsea and, in a brilliant analysis, my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke) made clear just how much what is claimed in the Budget—and, indeed, in his previous Budgets, and in all his preenings about his great success—depends on the inheritance that he received. It goes back to 1992 and 1993; it was not suddenly invented in new Labour Downing street. That was the burden of another brilliant analysis yesterday by my right hon. Friend the Member for Huntingdon (Mr. Major). In fact, this Budget debate has been more distinguished by ex-Chancellors making clear what is going on in the present Chancellor's Budget than any other such debate in the current Parliament. I admit that that is only a minor compensation for the deficiencies of the Budget itself.
Much more seriously, my right hon. Friend the Member for Kensington and Chelsea and, again, my right hon. and learned Friend the Member for Rushcliffe made clear just how far the Budget continues the process of undermining British competitiveness by increasing taxes and regulation. My right hon. and learned Friend described—accurately, I believe—the Chancellor's programme of deceleration and acceleration of public spending as an eccentricity. I shall explain in a moment why I think he slightly understated the case.

Mr. Bercow: Does my hon. Friend recall that in April 1997, in his foreword to Labour's business manifesto entitled "Equipping Britain for the Future", the right hon. Member for Dunfermline, East (Mr. Brown) specifically stated in terms—[Interruption.] The Chancellor can chunter from a sedentary position, but he cannot deny the facts. He stated in terms: "We will not impose burdensome regulations upon business, because we understand that successful businesses must keep costs down."
Does that not contrast radically with the verdict of the director general of the British Chambers of Commerce, Mr. Chris Humphries, who says, also in terms, "Whatever


its rhetoric, the reality is that the Government have dramatically increased the regulatory burdens that threaten small business competitiveness"?

Mr. Letwin: My hon. Friend is right to bring that up. There is only one difference on that issue between Mr. Chris Humphries and the Chancellor: the one is right, the other wrong.
This Budget does much worse things than any of those, such as hugely increase the spread of means-testing. As my hon. Friends the Members for Bournemouth, West (Mr. Butterfill) and for Bury St. Edmunds (Mr. Ruffley) made clear, it is also a Budget for complexity, but complexity for a purpose. What is the purpose? The purpose is huge redistribution. What is the effect? The effect is huge disincentive—a disincentive to save and to be thrifty. In fact, it is a disincentive to do the very things that the Chancellor wants everyone to do.
There is, however, a worse problem, and it is on that that I wish to dwell as we conclude this debate. The right hon. Member for North Durham (Mr. Radice)—who, alas, is not in the Chamber—made an interesting speech in which he made an admission which I suspect will earn him discredit in the eyes the Chancellor. He made the astonishing admission that the Government had not wholly abolished the economic cycle.
My right hon. and learned Friend the Member for Rushcliffe speculated that, at some time in the future, there might possibly be a somewhat slowing economy. We do not speculate or predict, but let us imagine that there is a faint possibility that even the magic of this Chancellor has failed to produce Elysium. It might just be that even this Chancellor has failed to produce a permanent solution to the economic cycle.
If there were an economic slowdown, what would the Chancellor do? He has vastly accentuated the cyclicality of tax receipts and pushed the emphasis of tax ever further on to those components that are most affected by the cycle. He has vastly aggrandised his corporation tax receipts, to which I have already referred, precisely because he has taken steps to ensure that he can. His climate change levy is highly cyclical in its effect. IR35 is about the most cyclical tax that there has ever been. His aggregates levy is cyclical. Every time that he transfers the burden on to business, he makes his tax receipts more cyclical.
Currently, of course, that has the most marvellous result for the Chancellor. As my right hon. Friend the Member for Kensington and Chelsea and my right hon. and learned Friend the Member for Rushcliffe pointed out, that has the effect that his taxes increase faster than he himself can predict, because the output gap is positive. What a wonderful scenario for a Chancellor—more tax revenue than even he could have dreamed of a year before.
The flipside of that coin is that, as soon as there is a slight slowdown, those tax receipts will diminish, not just as they always do—my .right hon. and learned Friend the Member for Rushcliffe was absolutely right that every Treasury has been bad at predicting how fast they will decline—but faster, because the cyclicality has increased. However, that is not the half of it.
This Chancellor, in his extension of means-tested benefits, has also made the social security system, which is the cyclical part of the expenditure side of the equation,

vastly more cyclical. The Chancellor shakes his head because he is proud that he has managed to cure the unemployment trap, as he sees it, by having extended the working families tax credit and other in-work benefits. He has done something to cure the unemployment trap but, in so doing, has also vastly accentuated the poverty trap.
The consequence for spending in a slowdown is that it will increase much faster than it has hitherto. It is obviously true that if there is a vast extension of means-tested benefits—such as the working families tax credit, the pensioner credit, the minimum income guarantee, the children's tax credit and the new children's credit—and there is a slowdown, as incomes decline, public spending in the Department of Social Security will accelerate more quickly than it has previously.
We have a Chancellor who has introduced arrangements that will increase the effect of a slowdown on decreasing taxes and increase the effect of a slowdown on increasing expenditure. That means that the deficit that he would be generating if there were a slowdown would be greater than it had previously been.
All of that comes against a background of a huge, locked-in ramping of those parts of public expenditure that are less cyclical in character. If a slowdown gets under way, the Chancellor will find it extraordinarily difficult to constrain the growth that he has set for the other elements of expenditure. He knows that, and we know it. It has always been the fate of Chancellors in the past.
The Chancellor has built the basis not for the Elysium of permanent stability, but for turning the economy into something that gives people the wrong incentives. It gives people a disincentive to save, to work more, or to behave responsibly towards their young and their old. Beyond that, the Chancellor has created circumstances that will mean that his much-trumpeted fiscal stability will give way more quickly than was the case in the past to the slightest downturn.
That is not what a responsible Budget, or sequence of responsible Budgets, would produce. The set of Budgets announced by this Chancellor looks good today, but may not look so good tomorrow. It is important that the House recognises that, and puts it on the record. If there is a slowdown and if the Chancellor's policies are fulfilled because he is lucky enough to be re-elected—which we hope will not happen—there will come a time when he will claim that something very strange has happened. However, nothing very strange will have happened. The Chancellor himself will have brought about the circumstances that I have described.
The answer to those problems is clear. It is to moderate the growth rate of public spending, so as to be able to reduce rather than increase the tax burden. It is to find means to do that so that people will not rely on means-tested benefits because they will have more of their own money. The answer to the problems that I have outlined also involves an honest taxation policy that does not shift the burden on to cyclical business taxes but acknowledges where tax lies.
In short, the answer to our economic problems is a programme that tries to bring back to the nation's finances some long-term stability. The Chancellor believes that he has achieved that, but he has not done so at all. Such a programme would continue the process bequeathed to the nation in the final four or five years of the previous


Conservative Administration. They were the first four or five years of the very process on which the Chancellor now congratulates himself.
If the nation does not follow that path, there will come a time when it will rue that decision. There will come a time when the Chancellor's wonderful smile will be wiped off his face. Our duty is to ensure that that smile is gone before the nation has to wipe it off at a time of economic slowdown. We can do that by making sure that we win the next general election and follow the right policies, rather than the wrong ones.

The Chief Secretary to the Treasury (Mr. Andrew Smith): That was an extraordinary speech. Clearly, it meant nothing to half the people in the Public Gallery, who left after five minutes. It certainly will not mean anything to any member of the general public unfortunate enough to chance upon it. The hon. Member for West Dorset (Mr. Letwin) went on about my right hon. Friend the Chancellor somehow creating disincentives to work. People will ask why there are a million more people in jobs under this Government.
My right hon. Friend the Chancellor has delivered a Budget that makes a clear choice about Britain's future. It sets out a platform on which to build opportunity and prosperity for all. It is a Budget that takes a balanced approach, and stability is the foundation. It proposes more investment in our public services, not less. It puts schools and hospitals first, and offers affordable tax cuts for hard-working families. It is a Budget that locks in stability and rejects the short-termism of the past. It rejects underinvestment and cuts in public services, and unaffordable tax cuts that would put investment at risk.
In this debate, the House has heard possible valedictory speeches from distinguished hon. Members. My right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon), who has made a distinguished contribution to fiscal matters in this House, praised the Chancellor's long-term approach to stability, investment and welfare-to-work policies. He said that it was the best Budget that he had been privileged to take part in.
My right hon. Friend the Member for North Durham (Mr. Radice), whose chairmanship of the Select Committee has drawn admiration from both sides of the House and respect from those of us who have appeared in front of him, praised the Chancellor for carrying through the radical reforms necessary for monetary and fiscal stability. As my right hon. Friends and others pointed out, that commitment to stability has meant that Britain has the lowest long-term interest rates for 35 years, the lowest inflation for 30 years and the lowest unemployment since 1975. It will remain the bedrock for all that we do.
The right hon. and learned Member for Rushcliffe (Mr. Clarke) spoke as though my right hon. Friend the Chancellor was somehow the lucky Chancellor and had a golden inheritance from the previous Administration. Who took debt as a share of GDP up to 44 per cent.? Who borrowed an extra £28 billion before we came into office? In contrast, who, within days of coming into office, made the Bank of England operationally independent? Who put

the fiscal rules in place? Who sorted out the public finances so that we have a platform for stability and lower interest rates?

Mr. Bercow: The Chief Secretary likes to pose as the high priest of prudence. Perhaps I can put to him the question that I put unavailingly to the Paymaster General the other day. What assessment has the right hon. Gentleman made of the impact of the change in the rules for the use of capital receipts from the sale of council houses on the size of interest repayments on local authority debt?

Mr. Smith: A prudent assessment. [Laughter.] It is because we have been prudent that the Chancellor was able to announce that he can pay off £34 billion of debt this year. That will cut the cost of debt interest which, when we came to power, cost more than the entire schools budget, and we are now putting more than £10 billion extra into the schools budget.
We remain on track to meet our fiscal rules. The Chancellor announced that we will retain our 2.5 per cent. inflation target. He has rejected calls by Conservative Members to set a lower target, a policy that would lead to upward pressure on interest rates.
With stability as the foundation, our ambitions for Britain can be met—more investment, not less, and targeted tax cuts on the nation's priorities. For example, as my hon. Friend the Member for Luton, South (Ms Moran) said, the community investment tax credit can bring great benefit to disadvantaged communities.

Mr. Kenneth Clarke: The right hon. Gentleman takes great credit for this extraordinary repayment of national debt, which was plainly unintended, and resulted from the Government failing to spend the money proposed in the Chancellor's previous spending plans. Does the right hon. Gentleman appreciate that over the past four years, the average European country has achieved faster growth than this country? Many have created employment at a faster rate than us, and all of them have enjoyed that with low inflation. Does he accept that his basking in the glory of the past four years is due to the lucky event of having had a good inheritance followed by four boom years for the world economy?

Mr. Smith: I can understand the right hon. and learned Gentleman's regrets about the way in which things turned out, but it is not a question of luck. Who put the fiscal discipline in place? Who paid off the debt? It was not "plainly unintended". We set out the fiscal rules. Unlike the right hon. Member for Kensington and Chelsea (Mr. Portillo), we set out the rules when we were in opposition—the golden rule that we will keep debt at prudent and sustainable levels and below 40 per cent. of GDP and keep the current account balanced over the economic cycle, borrowing only for investment. We are benefiting from prudence in cutting the national debt, saving £4.5 billion in interest payments a year. We are also benefiting from the cut in unemployment. That is not a matter of chance; it was a deliberate act of policy that was assisted by the new deal, which was greatly maligned and attacked by Conservative Members. They would abolish the new deal.

Mr. Letwin: Will the right hon. Gentleman tell us how long the economy has been growing?

Mr. Smith: It has been growing for more than a decade, but the last economic cycle ran from 1997 to 1999. The question is who is putting in place a foundation for sustainable and continuing growth in the economy, based on sound public finances, on more people in jobs and enabling us to act—

Mr. Clarke: rose—

Mr. Smith: I cannot give way. I have to reply to other matters raised in the debate.
As my hon. Friends the Members for East Lothian (Mr. Home Robertson), for Halifax (Mrs. Mahon), for Watford (Ms Ward) and for Kilmarnock and Loudoun (Mr. Browne) said, this was a Budget for families and a Budget to tackle poverty.

Mr. Clarke: I am grateful to the Minister for giving way again. He is vehement about the fact that the spectacular repayment of national debt was intended—it was a deliberate act of policy. It is extraordinary, a once-socialist Government are cheering that fantastic repayment of national debt. However, all the forecasts for taxation and expenditure were wrong. When did the Government predict that they would repay £35 billion of public debt as a policy target?

Mr. Smith: I found it revealing when the right hon. and learned Gentleman said in his speech that he saw merit in the way in which we acted to make the Bank of England operationally independent. The question that he must answer is why he did not do that when he had the chance, if that is what he believed.
This is a Budget for families and a Budget to tackle poverty. As a matter of choice, we increased child benefit to £15.50, which is a rise of 30 per cent. in real terms. We did it as a matter of choice, not chance or good fortune. We are introducing the children's tax credit at £10 a week—from next year it will be £20 a week for those with a child under the age of one. As a matter of choice, we are increasing maternity pay to £100 by 2003 and we will increase the payment period from 18 to 26 weeks, as well as introducing two weeks' paternity leave for new fathers.
The Budget also takes further steps to make work pay for hard-working families—25 million families will gain from the widening of the lower 10p tax rate. Now, more of their income will be taxed at that lower rate rather than at 22p. We have increased the working families tax credit by £5 and increased the minimum wage. That means that full-time work brings with it a guaranteed income of £225 a week. As my hon. Friend the Member for Halifax pointed out, together with the minimum wage, that makes an enormous difference to families on modest incomes.
Conservative Members, such as the hon. Member for Bury St. Edmunds (Mr. Ruffley), who attacked working families tax credit, would deny that money to hard-working families. They would deny it to those who need it most. Families are receiving on average £30 a week more than they were getting under the old family credit and many more of them are getting it.
Labour's Budgets mean that households will, on average, be £240 a year better off because of the measures we are introducing this year alone. Families with children will, on average, be £420 a year better off and 2 million of the poorest pensioners at least £800 a year better off. That is the measure of our commitment to building not only a strong economy but a strong society—one that is making everyone better off, with living standards having risen 10 per cent. since the general election, but giving particular help to the poorest and those who need it most. Of course, if we had not rejected unaffordable tax cuts, we should not have been able to offer a balanced approach in the Budget, nor could we have met the investment priorities of the people of Britain.
The hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) was good enough to acknowledge both that people had been helped into work through the new deal and the merits of the working families tax credit. However, on public expenditure, he should recall that the same balanced approach will enable Wales to gain £100 million from the Budget over three years. That is on top of the £2 billion uplift provided for Wales in the spending review, and the objective 1 funding of £270 million to help those areas about which he expressed concern and about which we, too, care deeply.
It is nonsense to claim that our policies are geared only towards the south-east of England. The Budget and the Government act for all the people of this country—giving extra help to those communities which need it most. There will be a strong partnership for action in Wales between the National Assembly, local authorities and Departments to ensure that those communities facing difficult times of transition and job losses receive the help that they need.

Mr. Letwin: rose—

Mr. Smith: I am sorry I cannot give way.
That balanced approach, which puts stability first and makes targeted tax cuts that we can afford, is also one that allows us to invest for the long term in Britain's schools and hospitals. For decades, those services suffered from the wrong choices. We choose not to return to those days of short-termism; instead, we choose a path of sustainable growth, with investment in key front-line services and staff.
As my hon. Friends the Members for Harlow (Mr. Rammell) and for Watford pointed out, we are seeing the benefits in our constituencies—in the classrooms and in the hospitals—as we improve services and are able to recruit more staff. My right hon. Friend the Secretary of State for Health spoke today of how he will spend the additional £1 billion over three years on the national health service. Money will go directly to primary care services. Between £500,000 and £1 million a year will go to each acute hospital trust in communities throughout our country.
Yesterday, my right hon. Friend the Secretary of State for Education and Employment set out his plans to spend £1 billion over the next three years on extra resources for our schools. He confirmed that direct payments will go to schools, with as much as £63,000 for the largest primary schools and as much as £115,000 for the largest secondary schools. Because we want more teachers and more nurses, we have set up special recruitment funds of £135 million for key health service staff and £200 million for education staff.
The hon. Member for Truro and St. Austell (Mr. Taylor) made some extraordinary claims about how much less he thought was going into health and education under the Labour Government. I checked the figures for NHS spending as a proportion of gross domestic product. The amount was 5.7 per cent. in 1996–97; by the current year, it had risen to 6.2 per cent. of a larger GDP. It will, of course, rise further. The extra spending in the Budget will come on top of the additional funding we have made available in the spending review. Spending as a whole will grow not at 3.4 per cent. but at 3.7 per cent.
Our choice is more investment—not less. Those who suggest a spending increase of 2.25 per cent. would see a shortfall over the next three years of more than £16 billion—resources taken away from schools and hospitals in every part of the country. As my hon. Friend the Member for Luton, South pointed out, Opposition Members must answer the question: on which schools and hospitals would their £16 billion axe fall?
In the brief time left for my speech, I will consider the remarks of Opposition Members. I am pleased to see the right hon. Member for East Devon (Sir P. Emery) in his place. He followed admirably his three-point rule, speaking with understandable feeling about the severity of the problems affecting agriculture, and the rural communities in particular, in his constituency as a consequence of foot and mouth disease. Of course that is a very sombre backdrop to our debate. It is a very serious situation indeed, and I believe that we are all agreed that every effort must be made, and no effort spared, to eradicate this terrible disease, which is inflicting such damage.
The right hon. Gentleman made the case for compensation for consequential loss, while acknowledging that no Government had provided such compensation. I believe that he can appreciate the difficulties of deciding who would benefit and by what amount, and where to draw the line. My hon. Friend the Member for Kilmarnock and Loudoun reminded us of the communities that have been devastated by pit closures and other industrial restructuring. I can tell the right hon. Member for East Devon that the Government do act to help communities that are facing critical challenges such as this disease, which is why we will be acting not only to eradicate it but, as soon as we have been able to do so, to consider what measures can be taken to regenerate the rural economies, including the tourism sector, which in turn is being so badly affected. As we draw up those plans, we shall be pleased to listen to the right hon. Gentleman and other hon. Members whose constituents are affected.
I shall comment all too briefly on the remarks of the Opposition Front-Bench team. This evening we received further confirmation in the debate that their sums do not add up, that they have no fiscal rules and that they have no basis for stability or sustainability in their approach. They say that public spending could only grow within their definition of trend growth of 2.25 per cent. If that is the claim that they make, even if we allow for what they say about honouring our spending commitments for their first year, it still leaves them with a spending gap not of the £8 billion that they claim, and which they cannot cover with spending savings because they have not been able to identify any that stand up, but of £11 billion. That gap shows that no one could believe what they say on tax, spending, the economy or anything else. That spending

gap wields an axe over the investment that the present Government are making in schools, in hospitals and in combating crime.
The Budget debates in the past few days have made clear the choices that the Government have made. We have rejected short-termism and underinvestment. We have rejected unaffordable tax cuts that would put at risk investment in our public services, and we have decided to invest for the long term. Our choice is to seize the opportunity that Britain has, not through some golden inheritance, not through chance, but through the choices that we have made and through the action that we have carried forward, in partnership with the British people. The choice is to invest in our schools, hospitals and disadvantaged communities, and the choice is to build on the new deal, which has got over a quarter of a million young people into work and cut youth unemployment by over three quarters, instead of cutting the new deal as the official Opposition would.
Our choice is to reward hard-working families with affordable tax cuts and measures to make work pay. Our choice is to make stability our foundation, rejecting the boom and bust of the past and the damage that that inflicted on our country in the past. A return to that policy is held as the threat from a Conservative party, a shadow Chancellor and a Leader of the Opposition who cannot be trusted by the people of this country, because their sums do not add up. We have made the right choices for the people of Britain: choices that will build a Britain of opportunity and prosperity for all.

Question put and agreed to.

Resolved,
(1) That it is expedient to amend the law with respect to the National Debt and the public revenue and to make further provision in connection with finance.
(2) Subject to paragraphs (3) to (6) below, this Resolution does not extend to the making of any amendment with respect to value added tax so as to provide—

(a) for zero-rating or exempting a supply, acquisition or importation;
(b) for refunding an amount of tax;
(c) for varying any rate at which that tax is at any time chargeable;
(d) for any relief, other than a relief which—

(i) so far as it is applicable to goods, applies to goods of every description, and
(ii) so far as it is applicable to services, applies to services of every description.

(3) Paragraph (2) above does not exclude the making of amendments with respect to value added tax—

(a) providing for refunds of the kind specified in paragraph (4) below;
(b) providing for that tax to be charged at a reduced rate of 5 per cent. on supplies of the descriptions specified in paragraph (5) below (and on equivalent acquisitions and importations); or
(c) making provision of the kind authorised by paragraph (6) below.

(4) The refunds mentioned in paragraph (3)(a) above are refunds of value added tax where—

(a) that tax is chargeable on a supply to, or an acquisition or importation by, a museum or gallery, and
(b) the supply, acquisition or importation is attributable to supplies of free rights of admission to the museum or gallery.



(5) The supplies mentioned in paragraph (3)(b) above are—

(a) supplies, in the course of a conversion of a building (or part of a building), of services related to the conversion if after the conversion the building (or part) contains living accommodation;
(b) supplies, in the course of the renovation or alteration (including the extension) of a dwelling that has been unoccupied for at least three years, of services related to the renovation or alteration;
(c) supplies of goods by a person making a supply of services within sub-paragraph (a) or (b) above if—

(i) those services include the incorporation of the goods into the building concerned (or its site), and
(ii) the goods are building materials within the meaning of Group 5 of Schedule 8 to the Value Added Tax Act 1994;

(d) supplies of children's car seats.

(6) The provision authorised by this paragraph is provision re-enacting, without altering any person's liability to value added tax or the amount of any such liability, provisions providing for that tax to be charged at a reduced rate of 5 per cent. on certain supplies, acquisitions and importations.

MADAM DEPUTY SPEAKER then, pursuant to Standing Order No. 51(3) (Ways and Means Motions), put forthwith the Questions necessary to dispose of the further motions.

2 HYDROCARBON OIL (RATES OF DUTY)

Resolved,
That—
(1) In section 6(1A) of the Hydrocarbon Oil Duties Act 1979—

(a) in paragraph (a), for "£0.4782" there shall be substituted "£0.4582"; and
(b) in paragraph (c), for "£0.4882" there shall be substituted "£0.4582".

(2) That subsection shall have effect until midnight on 14th June 2001 as if for paragraph
(b) there were substituted—

"(ba) £0.5268 in the case of unleaded petrol other than ultra low sulphur petrol;
(bb) £0.5468 in the case of light oil not within paragraph (a) or (ba) above;".

After that, paragraph (b) shall have effect as it did before.
(3) In section 8(3) of the Hydrocarbon Oil Duties Act 1979 for "£0.1500" there shall be substituted "£0.0900".
(4) This Resolution shall have effect as from 6 o'clock in the evening of 7th March 2001.
And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

3 HYDROCARBON OIL (REBATE ON UNLEADED PETROL)

Resolved,
That—
(1) For section 13A of the Hydrocarbon Oil Duties Act 1979 there shall be substituted—

Rebate on unleaded petrol

13A.—(1) On unleaded petrol, other than ultra low sulphur petrol, charged with the excise duty on hydrocarbon oil and delivered for home use there shall be allowed at the time of delivery a rebate of duty at the rate of £0.0586 a litre.
(2) Rebate is not allowed under this section in a case
where a rebate is allowed under section 14 below.".

(2) In paragraph 1(1) of Schedule 2A to that Act—

(a) for paragraphs (a) and (b) there shall be substituted—

(ab) adding lead to unleaded petrol in respect of which a rebate has been allowed under section 13A;"; and
(b) in paragraph (c)—

(i) for "paragraph (a)" there shall be substituted "paragraph (aa)", and
(ii) for "paragraph (b)" there shall be substituted "paragraph (ab)".

(3) For paragraph 2A of that Schedule there shall be substituted—

.—(1) A mixture which is unleaded petrol is produced in contravention of this paragraph if the mixture is produced by mixing—

(a) petrol on which duty has been paid at the rate specified in section 6(1A)(a), and
(b) petrol in respect of which a rebate has been allowed under section 13A,

and the mixture produced is unleaded petrol that is not ultra low sulphur petrol.

(2) This paragraph is subject to any direction given under paragraph 3.".

(4) In paragraph 8 of that Schedule, for sub-paragraph (3A) there shall be substituted—

"(3A) In the case of a mixture produced in contravention of paragraph 2A above, the rate is that produced by deducting from the rate in force under section 6(1A)(b) at the time the mixture is produced the rebate which at that time is in force under section 13A.' .

(5) This Resolution shall have effect as from 6 o'clock in the evening of 7th March 2001.

And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

4 TOBACCO PRODUCTS (RATES OF DUTY)

Resolved,
That—
(1) For the Table of rates of duty in Schedule 1 to the Tobacco Products Duty Act 1979 there shall be substituted—


"TABLE


1. Cigarettes
An amount equal to 22 per cent. of the retail price plus £92.25 per thousand cigarettes.


2. Cigars
£134.69 per kilogram.


3. Hand-rolling tobacco
£96.81 per kilogram.


4. Other smoking tobacco and chewing tobacco
£59.21 per kilogram.".

(2) This Resolution shall have effect as from 6 o'clock in the evening of 7th March 2001.

And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

5 DILUTION ETC. OF CIDER

Resolved,
That provision may be made authorising regulations under section 62(5) of the Alcoholic Liquor Duties Act 1979 to make provision about adding substances to, mixing, or carrying out other operations on or in relation to, cider.

6 GENERAL BETTING DUTY

Resolved,
That provision may be made about general betting duty.

7 VEHICLE EXCISE DUTY (GENERAL RATE)

Resolved,
That—
(1) In paragraph 1 of Schedule 1 to the Vehicle Excise and Registration Act 1994, in sub-paragraphs (2) and (2A) for "1,200 cubic centimetres" there shall be substituted "1,549 cubic centimetres".
This amendment shall apply to licences issued on or after 1st July 2001.
(2) Refunds shall be made by the Secretary of State, in accordance with the following provisions of this Resolution, in respect of licences—

(a) issued in the period beginning with 1st November 2000 and ending with 30th June 2001, and
(b) not surrendered before the end of that period,

where the amount of vehicle excise duty chargeable on the licence would have been less if the amendment in paragraph (1) of this Resolution had applied.
(3) The amount of the refund shall be—

(a) £55 for a 12 month licence, and
(b) £27.50 for a 6 month licence.

(4) The person entitled to the refund shall be—

(a) in the case of a licence in force on 30th June 2001, the keeper of the vehicle on that date;
(b) in the case of a licence that has ceased to be in force before that date, the keeper of the vehicle when the licence expired.

(5) For the purposes of paragraph (4) of this Resolution the keeper of the vehicle shall be taken to be—

(a) the person registered as keeper of the vehicle on the date in question, or
(b) if the Secretary of State has received notification of a change of ownership of the vehicle as a result of which another person is on that date entitled to be registered as the new keeper of the vehicle, that person.

(6) A refund shall only be made if an application is made for it in such form, and containing such particulars and supported by such documents, as the Secretary of State may require.
(7) The Secretary of State shall give notice in writing to any person appearing to him to be entitled to a refund—

(a) informing him that he appears to be entitled to a refund,
(b) enclosing an application form, and
(c) specifying the particulars and supporting documents to be provided.

(8) An application for, or the making of, a refund under this Resolution in respect of a licence shall not affect the validity of the licence.
(9) For the purposes of section 19 of the Vehicle Excise and Registration Act 1994 as it applies to the surrender on or after 1st July 2001 of a licence in respect of which a refund under this Resolution has been made, or applied for, the annual rate of duty chargeable on the licence shall be taken to be that which would have been chargeable if the amendment in paragraph (1) of this Resolution had applied.
(10) Section 45 of that Act shall apply to a declaration in connection with an application for a refund under this Resolution as it applies to a declaration in connection with an application for a vehicle licence.
(11) In the application of this Resolution to Northern Ireland, references to registration as the keeper of a vehicle shall be read as references to registration as the owner of the vehicle.
(12) This Resolution comes into force on 1st July 2001.
And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

8 VEHICLE EXCISE DUTY (GOODS VEHICLES)

Resolved,
That provision may be made increasing rates of duty set out in Part VIII of Schedule 1 to the Vehicle Excise and Registration Act 1994.

9 VEHICLE EXCISE DUTY (MOBILE PUMPING VEHICLES)

Resolved,
That provision may be made for mobile pumping vehicles to be special vehicles to which Part IV of Schedule 1 to the Vehicle Excise and Registration Act 1994 applies and for old mobile pumping vehicles not to be exempt vehicles for the purposes of that Act.

10 VEHICLE EXCISE DUTY (EXEMPTION OF AGRICULTURAL VEHICLES ETC.)

Resolved,
That—
(1) The vehicles that are exempt vehicles for the purposes of the Vehicle Excise and Registration Act 1994 ("the 1994 Act") shall include—

(a) the vehicles that would, apart from this Resolution, be special concessionary vehicles for the purposes of Part IVA of Schedule 1 to the 1994 Act, and
(b) motorcycles (within the meaning given by paragraph 2 of that Schedule) that are electrically propelled vehicles for the purposes of the 1994 Act.

(2) Part IVA of that Schedule shall cease to have effect.
(3) In Part II of that Schedule, paragraph 2 shall be amended as follows—

(a) in sub-paragraph (1)(a), omit "or the motorcycle is an electrically propelled vehicle", and
(b) in sub-paragraph (3), in the definition of "motorcycle", after "motortricycle" insert "but does not include an electrically propelled vehicle".

(4) The provisions of paragraphs (1) to (3) above apply to licences issued on or after 1st April 2001.
(5) Paragraph (6) below applies where a licence—

(a) is issued before 1st April 2001 for a relevant vehicle, and
(b) is in force on 1st April 2001 or comes into force after 1st April 2001.

(6) The licence shall, during the period—

(a) beginning with the later of 1st April 2001 and the day when it comes into force, and
(b) ending with the expiry of the period for which it is issued,

be deemed to be a nil licence for the purposes of the 1994 Act.
(7) A refund shall be made by the Secretary of State, in accordance with the following provisions of this Resolution, in respect of a licence for a relevant vehicle that—

(a) is issued before 1st March 2001, in force on 1st March 2001 and not surrendered before 1st April 2001,
(b) is issued before 1st March 2001, comes into force after 1st March 2001 and is not surrendered before 1st April 2001, or
(c) is issued in March 2001 and not surrendered before 1st April 2001.

(8) The amount of the refund is one-twelfth of the annual rate of duty chargeable on the licence for—

(a) in the case of a licence issued before 1st March 2001, each whole month after February 2001 that forms part of the period for which the licence was issued, and
(b) in the case of a licence issued on or after 1st March 2001, each whole month of the period for which the licence is issued.

(9) The person entitled to the refund is the person registered as the keeper of the relevant vehicle on 30th April 2001.


(10) The provisions of sections 10(2) and 19 of the 1994 Act do not apply to a licence in respect of which a person is entitled to a refund under this Resolution.
(11) In the application of this Resolution to Northern Ireland, references to registration as the keeper of a vehicle shall be read as references to registration as the owner of the vehicle.
(12) In paragraphs (5) to (9) above "relevant vehicle" means a vehicle of the description mentioned in sub-paragraph (a) or (b) of paragraph (1) above.
(13) This Resolution comes into force on 1st April 2001.
And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

11 AGGREGATES LEVY

Motion made, and Question put,
That provision may be made for charging a levy, to be known as aggregates levy, on aggregate subjected to commercial exploitation in the United Kingdom.

The House proceeded to a Division.

Madam Deputy Speaker (Mrs. Sylvia Heal): I ask the Serjeant at Arms to investigate the delay in the No Lobby.

The House having divided: Ayes 353, Noes 160.

Division No. 147]
[10.1 pm


AYES


Abbott, Ms Diane
Bruce, Malcolm (Gordon)


Ainger, Nick
Buck, Ms Karen


Ainsworth, Robert (Cov'try NE)
Burden, Richard


Alexander, Douglas
Burgon, Colin


Allan, Richard
Burstow, Paul


Allen, Graham
Butler, Mrs Christine


Anderson, Rt Hon Donald (Swansea E)
Byers, Rt Hon Stephen



Cable, Dr Vincent


Anderson, Janet (Rossendale)
Caborn, Rt Hon Richard


Armstrong, Rt Hon Ms Hilary
Campbell, Mrs Anne (C'bridge)


Ashdown, Rt Hon Paddy
Campbell, Rt Hon Menzies (NE Fife)


Ashton, Joe



Atkins, Charlotte
Campbell, Ronnie (Blyth V)


Austin, John
Campbell-Savours, Dale


Bailey, Adrian
Cann, Jamie


Baker, Norman
Caplin, Ivor


Ballard, Jackie
Casale, Roger


Banks, Tony
Caton, Martin


Barnes, Harry
Cawsey, Ian


Bayley, Hugh
Chaytor, David


Beckett, Rt Hon Mrs Margaret
Chidgey, David


Begg, Miss Anne
Clapham, Michael


Beith, Rt Hon A J
Clark, Rt Hon Dr David (S Shields)


Benn, Hilary (Leeds C)
Clark, Dr Lynda (Edinburgh Pentlands)


Benn, Rt Hon Tony (Chesterfield)



Bennett, Andrew F
Clark, Paul (Gillingham)


Benton, Joe
Clarke, Charles (Norwich S)


Bermingham, Gerald
Clarke, Rt Hon Tom (Coatbridge)


Berry, Roger
Clelland, David


Best, Harold
Clwyd, Ann


Blackman, Liz
Coaker, Vernon


Blears, Ms Hazel
Coffey, Ms Ann


Blunkett, Rt Hon David
Coleman, Iain


Boateng, Rt Hon Paul
Colman, Tony


Bradley, Keith (Withington)
Connarty, Michael


Bradley, Peter (The Wrekin)
Cook, Frank (Stockton N)


Bradshaw, Ben
Cook, Rt Hon Robin (Livingston)


Brake, Tom
Cooper, Yvette


Brand, Dr Peter
Corbett, Robin


Breed, Colin
Corbyn, Jeremy


Brown, Rt Hon Gordon (Dunfermline E)
Corston, Jean



Cotter, Brian


Brown, Russell (Dumfries)
Cousins, Jim


Browne, Desmond
Cranston, Ross





Crausby, David
Howells, Dr Kim


Cryer, Mrs Ann (Keighley)
Hughes, Ms Beverley (Stretford)


Cryer, John (Hornchurch)
Hughes, Kevin (Doncaster N)


Cummings, John
Hughes, Simon (Southwark N)


Cunningham, Rt Hon Dr Jack (Copeland)
Humble, Mrs Joan



Hurst, Alan


Cunningham, Jim (Cov'try S)
Hutton, John


Dalyell, Tam
Iddon, Dr Brian


Darling, Rt Hon Alistair
Illsley, Eric


Darvill, Keith
Jackson, Ms Glenda (Hampstead)


Davey, Edward (Kingston)
Jackson, Helen (Hillsborough)


Davey, Valerie (Bristol W)
Jenkins, Brian


Davidson, Ian
Johnson, Alan (Hull W & Hessle)


Davies, Rt Hon Denzil (Llanelli)
Johnson, Miss Melanie (Welwyn Hatfield)


Dawson, Hilton



Dean, Mrs Janet
Jones, Rt Hon Barry (Alyn)


Denham, Rt Hon John
Jones, Mrs Fiona (Newark)


Dismore, Andrew
Jones, Ms Jenny (Wolverh'ton SW)


Dobbin, Jim



Dobson, Rt Hon Frank
Jones, Jon Owen (Cardiff C)


Donohoe, Brian H
Jones, Dr Lynne (Selly Oak)


Doran, Frank
Jones, Martyn (Clwyd S)


Dowd, Jim
Jones, Nigel (Cheltenham)


Dunwoody, Mrs Gwyneth
Jowell, Rt Hon Ms Tessa


Eagle, Angela (Wallasey)
Joyce, Eric


Eagle, Maria (L'pool Garston)
Kaufman, Rt Hon Gerald


Edwards, Huw
Keeble, Ms Sally


Efford, Clive
Keen, Alan (Feltham & Heston)


Ellman, Mrs Louise
Keen, Ann (Brentford & Isleworth)


Etherington, Bill
Keetch, Paul


Fearn, Ronnie
Kemp, Fraser


Field, Rt Hon Frank
Kennedy, Jane (Wavertree)


Fisher, Mark
Kilfoyle, Peter


Fitzpatrick, Jim
King, Andy (Rugby & Kenilworth)


Fitzsimons, Mrs Lorna
King, Ms Oona (Bethnal Green)


Flint, Caroline
Kirkwood, Archy


Flynn, Paul
Kumar, Dr Ashok


Foster, Rt Hon Derek
Ladyman, Dr Stephen


Foster, Don (Bath)
Lammy, David


Foster, Michael J (Worcester)
Lawrence, Mrs Jackie


Galloway, George
Laxton, Bob


Gardiner, Barry
Lepper, David


George, Andrew (St Ives)
Leslie, Christopher


Gerrard, Neil
Levitt, Tom


Gidley, Sandra
Lewis, Ivan (Bury S)


Gilroy, Mrs Linda
Liddell, Rt Hon Mrs Helen


Godman, Dr Norman A
Linton, Martin


Godsiff, Roger
Lloyd, Tony (Manchester C)


Goggins, Paul
Lock, David


Golding, Mrs Llin
Love, Andrew


Gorrie, Donald
McAvoy, Thomas


Griffiths, Jane (Reading E)
McCabe, Steve


Griffiths, Win (Bridgend)
McCafferty, Ms Chris


Grocott, Bruce
McDonagh, Siobhain


Hain, Peter
Macdonald, Calum


Hall, Mike (Weaver Vale)
McFall, John


Hall, Patrick (Bedford)
McGuire, Mrs Anne


Hancock, Mike
McIsaac, Shona


Hanson, David
McKenna, Mrs Rosemary


Harman, Rt Hon Ms Harriet
McNulty, Tony


Harris, Dr Evan
MacShane, Denis


Healey, John
Mactaggart, Fiona


Henderson, Doug (Newcastle N)
McWilliam, John


Hendrick, Mark
Mahon, Mrs Alice


Heppell, John
Mallaber, Judy


Hesford, Stephen
Mandelson, Rt Hon Peter


Hill, Keith
Marsden, Gordon (Blackpool S)


Hinchliffe, David
Marsden, Paul (Shrewsbury)


Hodge, Ms Margaret
Marshall, Jim (Leicester S)


Hoey, Kate
Marshall-Andrews, Robert


Home Robertson, John
Martlew, Eric


Hood, Jimmy
Maxton, John


Hoon, Rt Hon Geoffrey
Meacher, Rt Hon Michael


Hope, Phil
Meale, Alan


Hopkins, Kelvin
Merron, Gillian


Howarth, Rt Hon Alan (Newport E)
Michael, Rt Hon Alun






Michie, Bill (Shef'ld Heeley)
Sheldon, Rt Hon Robert


Milburn, Rt Hon Alan
Shipley, Ms Debra


Miller, Andrew
Short, Rt Hon Clare


Mitchell, Austin
Simpson, Alan (Nottingham S)


Moonie, Dr Lewis
Skinner, Dennis


Moore, Michael
Smith, Rt Hon Andrew (Oxford E)


Moran, Ms Margaret
Smith, Jacqui (Redditch)


Morgan, Ms Julie (Cardiff N)
Smith, Llew (Blaenau Gwent)


Morley, Elliot
Snape, Peter


Morris, Rt Hon Sir John (Aberavon)
Spellar, John



Squire, Ms Rachel


Mudie, George
Starkey, Dr Phyllis


Mullin, Chris
Steinberg, Gerry


Murphy, Rt Hon Paul (Torfaen)
Stevenson, George


Naysmith, Dr Doug
Stewart, David (Inverness E)


Oaten, Mark
Stewart, Ian (Eccles)


O'Brien, Bill (Normanton)
Strang, Rt Hon Dr Gavin


O'Hara, Eddie
Straw, Rt Hon Jack


Olner, Bill
Stringer, Graham


O'Neill, Martin
Stuart, Ms Gisela


Öpik, Lembit
Stunell, Andrew


Organ, Mrs Diana
Sutcliffe, Gerry


Osborne, Ms Sandra
Taylor, Rt Hon Mrs Ann (Dewsbury)


Palmer, Dr Nick



Pearson, Ian
Taylor, Ms Dari (Stockton S)


Pendry, Rt Hon Tom
Taylor, David (NW Leics)


Pike, Peter L
Taylor, Matthew (Truro)


Plaskitt, James
Temple-Morris, Peter


Pond, Chris
Thomas, Gareth (Clwyd W)


Pope, Greg
Thomas, Gareth R (Harrow W)


Pound, Stephen
Timms, Stephen


Powell, Sir Raymond
Tipping, Paddy


Prentice, Ms Bridget (Lewisham E)
Todd, Mark


Prentice, Gordon (Pendle)
Tonge, Dr Jenny


Primarolo, Dawn
Touhig, Don


Prosser, Gwyn
Truswell, Paul


Purchase, Ken
Turner, Dennis (Wolverh'ton SE)


Quinn, Lawrie
Turner, Dr Desmond (Kemptown)


Radice, Rt Hon Giles
Twigg, Derek (Halton)


Rapson, Syd
Twigg, Stephen (Enfield)


Raynsford, Nick
Tyler, Paul


Reed, Andrew (Loughborough)
Walley, Ms Joan


Reid, Rt Hon Dr John (Hamilton N)
Ward, Ms Claire


Rendel, David
Wareing, Robert N


Robertson, John (Glasgow Anniesland)
Watts, David



White, Brian


Robinson, Geoffrey (Cov'try NW)
Whitehead, Dr Alan


Roche, Mrs Barbara
Wicks, Malcolm


Rogers, Allan
Williams, Rt Hon Alan (Swansea W)


Rooker, Rt Hon Jeff



Rooney, Terry
Williams, Alan W (E Carmarthen)


Ross, Ernie (Dundee W)
Williams, Mrs Betty (Conwy)


Rowlands, Ted
Willis, Phil


Roy, Frank
Wills, Michael


Ruane, Chris
Wilson, Brian


Ruddock, Joan
Winnick, David


Russell, Bob (Colchester)
Worthington, Tony


Russell, Ms Christine (Chester)
Wray, James


Ryan, Ms Joan
Wright, Anthony D (Gt Yarmouth)


Sanders, Adrian
Wright, Tony (Cannock)


Sarwar, Mohammad



Sedgemore, Brian
Tellers for the Ayes:


Shaw, Jonathan
Mr. David Jamieson and


Sheerman, Barry
Mr. Clive Betts.


NOES


Ainsworth, Peter (E Surrey)
Beresford, Sir Paul


Amess, David
Blunt, Crispin


Ancram, Rt Hon Michael
Body, Sir Richard


Arbuthnot, Rt Hon James
Boswell, Tim


Atkinson, David (Bour'mth E)
Bottomley Peter (Worthing W)


Atkinson, Peter (Hexham)
Bottomley, Rt Hon Mrs Virginia


Baldry, Tony
Brady, Graham


Beggs, Roy
Brooke, Rt Hon Peter


Bell, Martin (Tatton)
Browning, Mrs Angela


Bercow, John
Bruce, Ian (S Dorset)





Burnett, John
MacKay, Rt Hon Andrew


Burns, Simon
Maclean, Rt Hon David


Butterfill, John
McLoughlin, Patrick


Cash, William
Madel, Sir David


Chapman, Sir Sydney (Chipping Barnet)
Malins, Humfrey



Maples, John


Chope, Christopher
Maude, Rt Hon Francis


Clappison, James
Mawhinney, Rt Hon Sir Brian


Clark, Dr Michael (Rayleigh)
May, Mrs Theresa


Clarke, Rt Hon Kenneth (Rushcliffe)
Michie, Mrs Ray (Argyll & Bute)



Morgan, Alasdair (Galloway)


Clifton-Brown, Geoffrey
Moss, Malcolm


Collins, Tim
Nicholls, Patrick


Cormack, Sir Patrick
Norman, Archie


Cran, James
O'Brien, Stephen (Eddisbury)


Curry, Rt Hon David
Ottaway, Richard


Davies, Quentin (Grantham)
Paice, James


Davis, Rt Hon David (Haltemprice)
Paterson, Owen


Day, Stephen
Pickles, Eric


Donaldson, Jeffrey
Portillo, Rt Hon Michael


Dorrell, Rt Hon Stephen
Prior, David


Duncan, Alan
Randall, John


Duncan Smith, Iain
Redwood, Rt Hon John


Emery, Rt Hon Sir Peter
Robathan, Andrew


Evans, Nigel
Robertson, Laurence (Tewk'b'ry)


Ewing, Mrs Margaret
Robinson, Peter (Belfast E)


Fabricant, Michael
Roe, Mrs Marion (Broxbourne)


Fallon, Michael
Ruffley, David


Flight, Howard
St Aubyn, Nick


Fox, Dr Liam
Sayeed, Jonathan


Fraser, Christopher
Shephard, Rt Hon Mrs Gillian


Gale, Roger
Shepherd, Richard


Garnier, Edward
Smith, Sir Robert (W Ab'd'ns)


Gibb, Nick
Smyth, Rev Martin (Belfast S)


Gill, Christopher
Spelman, Mrs Caroline


Gillan, Mrs Cheryl
Spicer, Sir Michael


Gorman, Mrs Teresa
Spring, Richard


Green, Damian
Stanley, Rt Hon Sir John


Greenway, John
Steen, Anthony


Grieve, Dominic
Swayne, Desmond


Gummer, Rt Hon John
Swinney, John


Hague, Rt Hon William
Syms, Robert


Hamilton, Rt Hon Sir Archie
Tapsell, Sir Peter


Hammond, Philip
Taylor, Ian (Esher & Walton)


Hawkins, Nick
Taylor, Rt Hon John D (Strangford)



Taylor, John M (Solihull)


Hayes, John
Taylor, Sir Teddy


Heald, Oliver



Heath, David (Somerton & Frome)
Thomas, Simon (Ceredigion)


Heathcoat-Amory, Rt Hon David
Thompson, William



Townend, John


Hogg, Rt Hon Douglas
Tredinnick, David


Horam, John
Trend, Michael


Howarth, Gerald (Aldershot)
Tyrie, Andrew


Jack, Rt Hon Michael
Walter, Robert


Jackson, Robert (Wantage)
Waterson, Nigel


Jenkin, Bernard
Webb, Steve


Key, Robert
Wells, Bowen


Kirkbride, Miss Julie
Welsh, Andrew


Laing, Mrs Eleanor
Whitney, Sir Raymond


Lait, Mrs Jacqui
Whittingdale, John


Lansley, Andrew
Widdecombe, Rt Hon Miss Ann


Leigh, Edward
Wigley, Rt Hon Dafydd


Letwin, Oliver
Wilkinson, John


Lilley, Rt Hon Peter
Willetts, David


Livsey, Richard
Wilshire, David


Lloyd, Rt Hon Sir Peter (Fareham)
Winterton, Mrs Ann (Congleton)


Llwyd, Elfyn
Winterton, Nicholas (Macclesfield)


Loughton, Tim
Yeo, Tim


Luff, Peter
Young, Rt Hon Sir George


Lyell, Rt Hon Sir Nicholas



McCrea, Dr William
Tellers for the Noes:


MacGregor, Rt Hon John
Mr. James Gray and


McIntosh, Miss Anne
Mr. Keith Simpson.

Question accordingly agreed to.

12 INCOME TAX (CHANGE AND RATES FOR 2001–02)

Motion made, and Question put,
That income tax shall be charged for the year 2001–02, and for that year—

(a) the starting rate shall be 10 per cent.;
(b) the basic rate shall be 22 per cent.; and
(c) the higher rate shall be 40 per cent.

And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

The House divided: Ayes 326, Noes 41.

Division No. 148]
[10.18 pm


AYES


Abbott, Ms Diane
Clarke, Charles (Norwich S)


Ainger, Nick
Clarke, Rt Hon Tom (Coatbridge)


Ainsworth, Robert (Cov'try NE)
Clelland, David


Alexander, Douglas
Clwyd, Ann


Allen, Graham
Coaker, Vernon


Anderson, Rt Hon Donald (Swansea E)
Coffey, Ms Ann



Coleman, Iain


Anderson, Janet (Rossendale)
Colman, Tony


Armstrong, Rt Hon Ms Hilary
Connarty, Michael


Ashton, Joe
Cook, Frank (Stockton N)


Atkins, Charlotte
Cook, Rt Hon Robin (Livingston)


Austin, John
Cooper, Yvette


Bailey, Adrian
Corbett, Robin


Banks, Tony
Corbyn, Jeremy


Barnes, Harry
Corston, Jean


Bayley, Hugh
Cousins, Jim


Beckett, Rt Hon Mrs Margaret
Cranston, Ross


Begg, Miss Anne
Crausby, David


Beggs, Roy
Cryer, Mrs Ann (Keighley)


Bell, Martin (Tatton)
Cryer, John (Hornchurch)


Benn, Hilary (Leeds C)
Cunningham, Rt Hon Dr Jack (Copeland)


Benn, Rt Hon Tony (Chesterfield)



Bennett, Andrew F
Cunningham, Jim (Cov'try S)


Benton, Joe
Dalyell, Tam


Bermingham, Gerald
Darling, Rt Hon Alistair


Berry, Roger
Darvill, Keith


Best, Harold
Davey, Valerie (Bristol W)


Blackman, Liz
Davidson, Ian


Blears, Ms Hazel
Davies, Rt Hon Denzil (Llanelli)


Blunkett, Rt Hon David
Dawson, Hilton


Boateng, Rt Hon Paul
Dean, Mrs Janet


Bradley, Keith (Withington)
Denham, Rt Hon John


Bradley, Peter (The Wrekin)
Dismore, Andrew


Bradshaw, Ben
Dobbin, Jim


Brown, Rt Hon Gordon (Dunfermline E)
Dobson, Rt Hon Frank



Donaldson, Jeffrey


Brown, Russell (Dumfries)
Donohoe, Brian H


Browne, Desmond
Doran, Frank


Buck, Ms Karen
Dowd, Jim


Burden, Richard
Dunwoody, Mrs Gwyneth


Burgon, Colin
Eagle, Maria (L'pool Garston)


Butler, Mrs Christine
Edwards, Huw


Byers, Rt Hon Stephen
Efford, Clive


Caborn, Rt Hon Richard
Ellman, Mrs Louise


Campbell, Mrs Anne (C'bridge)
Etherington, Bill


Campbell, Ronnie (Blyth V)
Field, Rt Hon Frank


Campbell-Savours, Dale
Fisher, Mark


Cann, Jamie
Fitzpatrick, Jim


Caplin, Ivor
Fitzsimons, Mrs Lorna


Casale, Roger
Flint, Caroline


Caton, Martin
Flynn, Paul


Cawsey, Ian
Foster, Rt Hon Derek


Chaytor, David
Foster, Michael J (Worcester)


Clapham, Michael
Foulkes, George


Clark, Rt Hon Dr David (S Shields)
Galloway, George


Clark, Dr Lynda (Edinburgh Pentlands)
Gardiner, Barry



Gerrard, Neil


Clark, Paul (Gillingham)
Gilroy, Mrs Linda





Godman, Dr Norman A
McCrea, Dr William


Godsiff, Roger
McDonagh, Siobhain


Goggins, Paul
Macdonald, Calum


Golding, Mrs Llin
McFall, John


Griffiths, Jane (Reading E)
McGuire, Mrs Anne


Griffiths, Win (Bridgend)
McIsaac, Shona


Hain, Peter
McKenna, Mrs Rosemary


Hall, Mike (Weaver Vale)
McNulty, Tony


Hall, Patrick (Bedford)
MacShane, Denis


Hanson, David
Mactaggart, Fiona


Harman, Rt Hon Ms Harriet
McWilliam, John


Healey, John
Mahon, Mrs Alice


Henderson, Doug (Newcastle N)
Mallaber, Judy


Hendrick, Mark
Mandelson, Rt Hon Peter


Heppell, John
Marsden, Gordon (Blackpool S)


Hesford, Stephen
Marsden, Paul (Shrewsbury)


Hill, Keith
Marshall, Jim (Leicester S)


Hinchliffe, David
Marshall-Andrews, Robert


Hodge, Ms Margaret
Martlew, Eric


Hoey, Kate
Maxton, John


Home Robertson, John
Meacher, Rt Hon Michael


Hood, Jimmy
Meale, Alan


Hoon, Rt Hon Geoffrey
Merron, Gillian


Hope, Phil
Michael, Rt Hon Alun


Hopkins, Kelvin
Michie, Bill (Shef'ld Heeley)


Howarth, Rt Hon Alan (Newport E)
Milburn, Rt Hon Alan


Howells, Dr Kim
Miller, Andrew


Hughes, Ms Beverley (Stretford)
Mitchell, Austin


Hughes, Kevin (Doncaster N)
Moonie, Dr Lewis


Humble, Mrs Joan
Moran, Ms Margaret


Hurst, Alan
Morgan, Ms Julie (Cardiff N)


Hutton, John
Morley, Elliot


Iddon, Dr Brian
Morris, Rt Hon Sir John (Aberavon)


Illsley, Eric



Jackson, Ms Glenda (Hampstead)
Mudie, George


Jackson, Helen (Hillsborough)
Mullin, Chris


Jenkins, Brian
Murphy, Rt Hon Paul (Torfaen)


Johnson, Alan (Hull W & Hessle)
Naysmith, Dr Doug


Johnson, Miss Melanie (Welwyn Hatfield)
O'Brien, Bill (Normanton)



O'Hara, Eddie


Jones, Rt Hon Barry (Alyn)
Olner, Bill


Jones, Mrs Fiona (Newark)
O'Neill, Martin


Jones, Ms Jenny (Wolverh'ton SW)
Organ, Mrs Diana



Osborne, Ms Sandra


Jones, Jon Owen (Cardiff C)
Palmer, Dr Nick


Jones, Dr Lynne (Selly Oak)
Pearson, Ian


Jones, Martyn (Clwyd S)
Pendry, Rt Hon Tom


Jowell, Rt Hon Ms Tessa
Pike, Peter L


Joyce, Eric
Plaskitt, James


Kaufman, Rt Hon Gerald
Pond, Chris


Keeble, Ms Sally
Pope, Greg


Keen, Alan (Feltham & Heston)
Pound, Stephen


Keen, Ann (Brentford & Isleworth)
Prentice, Ms Bridget (Lewisham E)


Kemp, Fraser
Prentice, Gordon (Pendle)


Kennedy, Jane (Wavertree)
Primarolo, Dawn


Kilfoyle, Peter
Prosser, Gwyn


King, Andy (Rugby & Kenilworth)
Purchase, Ken


King, Ms Oona (Bethnal Green)
Quinn, Lawrie


Kumar, Dr Ashok
Radice, Rt Hon Giles


Ladyman, Dr Stephen
Rapson, Syd


Lammy, David
Raynsford, Nick


Lawrence, Mrs Jackie
Reed, Andrew (Loughborough)


Laxton, Bob
Reid, Rt Hon Dr John (Hamilton N)


Lepper, David
Robertson, John (Glasgow Anniesland)


Leslie, Christopher



Levitt, Tom
Robinson, Geoffrey (Cov'try NW)


Lewis, Ivan (Bury S)
Robinson, Peter (Belfast E)


Liddell, Rt Hon Mrs Helen
Roche, Mrs Barbara


Linton, Martin
Rogers, Allan


Lloyd, Tony (Manchester C)
Rooker, Rt Hon Jeff


Llwyd, Elfyn
Rooney, Terry


Lock, David
Ross, Ernie (Dundee W)


Love, Andrew
Ross, William (E Lond'y)


McAvoy, Thomas
Rowlands, Ted


McCabe, Steve
Roy, Frank


McCafferty, Ms Chris
Ruane, Chris






Ruddock, Joan
Thomas, Gareth (Clwyd W)


Russell, Ms Christine (Chester)
Thomas, Gareth R (Harrow W)


Ryan, Ms Joan
Thomas, Simon (Ceredigion)


Sarwar, Mohammad
Thompson, William


Sedgemore, Brian
Timms, Stephen


Shaw, Jonathan
Tipping, Paddy


Sheerman, Barry
Todd, Mark


Sheldon, Rt Hon Robert
Touhig, Don


Shipley, Ms Debra
Truswell, Paul


Short, Rt Hon Clare
Turner, Dennis (Wolverh'ton SE)


Simpson, Alan (Nottingham S)
Turner, Dr Desmond (Kemptown)


Skinner, Dennis
Twigg, Derek (Halton)


Smith, Rt Hon Andrew (Oxford E)
Twigg, Stephen (Enfield)


Smith, Rt Hon Chris (Islington S)
Walley, Ms Joan


Smith, Jacqui (Redditch)
Ward, Ms Claire


Smith, Llew (Blaenau Gwent)
Wareing, Robert N


Smyth, Rev Martin (Belfast S)
Watts, David


Snape, Peter
White, Brian


Spellar, John
Whitehead, Dr Alan


Squire, Ms Rachel
Wicks, Malcolm


Starkey, Dr Phyllis
Wigley, Rt Hon Dafydd


Steinberg, Gerry
Williams, Rt Hon Alan (Swansea W)


Stevenson, George



Stewart, David (Inverness E)
Williams, Alan W (E Carmarthen)


Stewart, Ian (Eccles)
Williams, Mrs Betty (Conwy)


Strang, Rt Hon Dr Gavin
Wills, Michael


Straw, Rt Hon Jack
Wilson, Brian


Stringer, Graham
Winnick, David


Stuart, Ms Gisela
Worthington, Tony


Sutcliffe, Gerry
Wray, James


Taylor, Rt Hon Mrs Ann (Dewsbury)
Wright, Anthony D (Gt Yarmouth)



Wright, Tony (Cannock)


Taylor, Ms Dari (Stockton S)



Taylor, David (NW Leics)
Tellers for the Ayes:


Taylor, Rt Hon John D (Strangford)
Mr. David Jamieson and


Temple-Morris, Peter
Mr. Clive Betts.


NOES


Allan, Richard
Harvey, Nick


Ashdown, Rt Hon Paddy
Heath, David (Somerton & Frome)


Baker, Norman
Hughes, Simon (Southwark N)


Ballard, Jackie
Jones, Nigel (Cheltenham)


Beith, Rt Hon A J
Keetch, Paul


Brake, Tom
Kirkwood, Archy


Brand, Dr Peter
Livsey, Richard


Breed, Colin
Michie, Mrs Ray (Argyll & Bute)


Burnett, John
Moore, Michael


Burstow, Paul
Oaten, Mark


Cable, Dr Vincent
Öpik, Lembit


Campbell, Rt Hon Menzies (NE Fife)
Rendel, David



Russell, Bob (Colchester)


Chidgey, David
Smith, Sir Robert (W Ab'd'ns)


Cotter, Brian
Taylor, Matthew (Truro)


Davey, Edward (Kingston)
Tonge, Dr Jenny


Fearn, Ronnie
Tyler, Paul


Foster, Don (Bath)
Webb, Steve


George, Andrew (St Ives)
Willis, Phil


Gidley, Sandra



Gornie, Donald
Tellers for the Noes:


Hancock, Mike
Mr. Andrew Stunell and


Harris, Dr Evan
Mr. Adrian Sanders.

Question accordingly agreed to.

13 INCOME TAX (STARTING RATE LIMIT FOR 2001–02)

Resolved,
That—
(1) For the year 2001–02 the amount specified in section 1(2)(aa) of the Income and Corporation Taxes Act 1988 shall be £1,880.
(2) Accordingly, section 1(4) of that Act, so far as it relates to the amount so specified, shall not apply for that year.
(3) Nothing in this Resolution shall require any change to be made in the amounts deductible or repayable under section 203 of that Act before 18th May 2001.

And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

14 CHILDREN'S TAX CREDIT

Resolved,
That—
(1) In section 257AA(2) of the Income and Corporation Taxes Act 1988 for "£4,420" there shall be substituted "£5,200".
(2) This Resolution has effect for the year 2001–02.
(3) Nothing in this Resolution shall require any change to be made in the amounts deductible or repayable under section 203 of the Income and Corporation Taxes Act 1988 before 18th May 2001.
And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

15 CORPORATION TAX (CHARGE AND RATE FOR 2002)

Resolved,
That, for the financial year 2002, corporation tax shall be charged at the rate of 30 per cent.

16 CORPORATION TAX (SMALL COMPANIES' RATE FOR 2001)

Resolved,
That, for the financial year 2001—

(a) the small companies' rate shall be 20 per cent., and
(b) the fraction mentioned in section 13(2) of the Income and Corporation Taxes Act 1988 shall be one fortieth.

17 CORPORATION TAX (STARTING RATE FOR 2001)

Resolved,
That, for the financial year 2001—

(a) the corporation tax starting rate shall be 10 per cent., and
(b) the fraction mentioned in section 13AA(3) of the Income and Corporation Taxes Act 1988 shall be one fortieth.

18 EMPLOYEE SHARE OWNERSHIP PLANS

Resolved,
That provision (including retrospective provision) may be made about employee share ownership plans.

19 ENTERPRISE INVESTMENT SCHEME

Resolved,
That provision may be made amending Chapter III of Part VII of the Income and Corporation Taxes Act 1988.

20 LOSS RELIEF ON SHARES IN TRADING COMPANIES

Resolved,
That provision may be made about the circumstances in which companies that are wound up are to be treated as qualifying trading companies for the purposes of sections 573 to 576 of the Income and Corporation Taxes Act 1988.

21 CORPORATE VENTURING SCHEME

Resolved,
That provision may be made amending Schedule 15 to the Finance Act 2000.

22 CAPITAL ALLOWANCES

Resolved,
That provision (including retrospective provision) may be made about capital allowances.

23 REPEAL OF CERTAIN RELIEFS

Resolved,
That provision may be made for the repeal of sections 534, 535, 537A and 538 of the Income and Corporation Taxes Act 1988.

24 PAYMENTS TO EMPLOYERS OUT OF PENSION FUNDS

Resolved,
That provision may be made as to the amount recoverable under section 601(2) of the Income and Corporation Taxes Act 1988.

25 DEDUCTIONS FOR DEEMED MANUFACTURED PAYMENTS

Resolved,
That—
(1) Section 736B of the Income and Corporation Taxes Act 1988 shall be amended as follows.
(2) In subsection (2), after "shall apply" there shall be inserted ", subject to subsection (2A) below,".
(3) After that subsection there shall be inserted—
(2A) The borrower is not entitled, by virtue of anything in Schedule 23A or any provision of regulations under that Schedule, or otherwise—

(a) to any deduction in computing profits or gains for the purposes of income tax or corporation tax, or
(b) to any deduction against total income or, as the case may be, total profits,

in respect of any such deemed requirement or payment as is provided for by subsection (2) above.
Where the borrower is a company, an amount may not be surrendered by way of group relief if a deduction in respect of it is prohibited by this subsection.".
(4) This Resolution shall apply to payments treated under section 736B as made on or after 3rd October 2000.

26 DOUBLE TAXATION RELIEF

Resolved,
That provision may be made amending Part XVIII of the Income and Corporation Taxes Act 1988.

27 CONTROLLED FOREIGN COMPANIES

Resolved,
That provision may be made amending Part I of Schedule 25 to the Income and Corporation Taxes Act 1988.

28 LIFE POLICIES ETC.

Resolved,
That provision may be made about gains arising in connection with policies of life assurance, contracts for life annuities and capital redemption policies.

29 DEDUCTION OF TAX (PAYMENTS BETWEEN COMPANIES ETC.)

Resolved,
That—
(1) After section 349 of the Income and Corporation Taxes Act 1988 there shall be inserted—

Exceptions to section 349 for payments between companies etc

349A.—(1) The provisions specified in subsection (3) below (which require tax to be deducted on making certain payments) do not apply to a payment made by a company if, at the time the payment is made, the company reasonably believes that one of the conditions specified in section 349B is satisfied.

(2) Subsection (1) above has effect subject to any directions under section 349C.

(3) The provisions are—

section 349(1) (certain annuities and other annual payments, and royalties and other sums paid for use of UK patents),

section 349(2)(a) and (b) (UK interest),

section 349(3A) (dividend or interest on securities issued by building societies), and

section 524(3)(b) (which provides for section 349(1) to apply to proceeds of sale of UK patent rights).

(4) References in subsection (3) above to any provision of section 349 do not include that provision as applied—

(a) under section 777(9) (directions applying section 349(1) to certain payments to non-residents), or
(b) by paragraph 4(2) of Schedule 23A (manufactured overseas dividends to be treated as annual payments within section 349).

(5) References in this section to the company by which a payment is made do not include a company acting as trustee or agent for another person.

(6) For the purposes of this section, a payment by a partnership is treated as made by a company if any member of the partnership is a company.

The conditions mentioned in section 349A(1)
349B.—(1) The first of the conditions mentioned in section 349A(1) is that the person beneficially entitled to the income in respect of which the payment is made is—

(a) a company resident in the United Kingdom, or
(b) a partnership each member of which is a company resident in the United Kingdom.

(2) The second of those conditions is that—

(a) the person beneficially entitled to the income in respect of which the payment is made is a company not resident in the United Kingdom ("the non-resident company"),
(b) the non-resident company carries on a trade in the United Kingdom through a branch or agency, and
(c) the payment falls to be brought into account in computing the chargeable profits (within the meaning given by section 11(2)) of the non-resident company.

Directions disapplying section 349A(1)

349C.—(1) The Board may give a direction to a company directing that section 349A(1) is not to apply in relation to any payment that—

(a) is made by the company after the giving of the direction, and
(b) is specified in the direction or is of a description so specified.

(2) A direction under this section may be varied or revoked by a subsequent such direction.

(3) In this section "company" includes a partnership of which any member is a company.

Section 349A(1): consequences of reasonable but incorrect belief

349D.—(1) Where—

(a) a payment is made by a company without an amount representing the income tax on the payment being deducted from the payment,
(b) at the time the payment is made, the company reasonably believes that one of the conditions specified in section 349B is satisfied,
(c) if the company did not so believe, tax would be deductible from the payment under section 349, and
(d) neither of the conditions specified in section 349B is satisfied at the time the payment is made,

section 350 applies as if the payment were within section 349 (and Schedule 16 applies as if tax were deductible from the payment under section 349).

(2) In this section "company" includes a partnership of which any member is a company.".

(2) In section 98 of the Taxes Management Act 1970, after subsection (4) there shall be inserted—

"(4A) If—

(a) a failure to comply with section 350(1) of, or Schedule 16 to, the principal Act arises from a person's failure to deliver an account, or show the amount, of a payment, and
(b) the payment is within subsection (4B) below,

subsection (1) above shall have effect as if for "£300" there were substituted "£3,000" and as if for "£60" there were substituted "£600".

(4B) A payment is within this subsection if—

(a) the payment is made by a company without an amount representing the income tax on the payment being deducted from the payment,
(b) at the time the payment is made, the company—

(i) does not believe that either of the conditions specified in section 349B of the principal Act is satisfied, or
(ii) where it believes that either of those conditions is satisfied, could not reasonably so believe,

(c) the payment is one from which tax is deductible under section 349 of the principal Act unless the company reasonably believes that one of those conditions is satisfied, and
(d) neither of those conditions is satisfied at the time the payment is made.

(4C) In subsection (4B) above "company" includes a partnership of which any member is a company.".

(3) In section 338(4) of the Income and Corporation Taxes Act 1988, after paragraph (a) there shall be inserted—
(aa) the person beneficially entitled to the income in respect of which the payment is made is a company not resident in the United Kingdom ("the non-resident company"), the non-resident company carries on a trade in the United Kingdom through a branch or agency and the payment falls to be brought into account in computing the chargeable profits (within the meaning given by section 11(2)) of the non-resident company, or".

(4) This Resolution applies to payments made on or after 1st April 2001.

And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

30 DEDUCTION OF TAX (PAYMENTS BETWEEN GROUP MEMBERS)

Resolved,
That provision may be made for repealing sections 247 and 248 of the Income and Corporation Taxes Act 1988.

31 PROVISIONAL REPAYMENTS

Resolved,
That provision may be made for section 438A of, and Schedule 19AB to, the Income and Corporation Taxes Act 1988 to cease to apply in relation to income tax borne by deduction.

32 PAYMENTS WHERE RETURN AMENDED

Resolved,
That provision may be made about payments due as a result of the amendment of a return.

33 STAMP DUTY RESERVE TAX (UNIT TRUST SCHEMES)

Resolved,
That—

(1) Schedule 19 to the Finance Act 1999 shall be amended as follows.
(2) In paragraph 2(4), after "6" there shall be inserted ", 6A".
(3) In paragraph 4, at the end there shall be inserted—

(6) If a certificate is given in accordance with paragraph 6A(1)(c) in respect of a period which includes the relevant two-week period in the case of the unit in question in sub-paragraph (1), there shall be left out of account in applying this paragraph in relation to that unit—

(a) any issue of a unit which is to be held within an individual pension account, and
(b) any surrender of a unit which, immediately before the surrender, was held within an individual pension account.

(7) "Individual pension account" has the same meaning in sub-paragraph (6) as it has in paragraph 6A.".
(4) After paragraph 6 there shall be inserted—

Exclusion of charge in case of individual pension accounts

6A.—(1) There is no charge to tax under this Part of this Schedule on the surrender of the unit if—

(a) immediately before the surrender, the unit is held within an individual pension account,
(b) not all the units under the unit trust scheme are so held at that time, and
(c) a certificate pursuant to sub-paragraph (2) is contained in, or provided with, the relevant monthly tax return.

(2) The certificate must be given by the persons making the relevant monthly tax return and must state—

(a) that at all times in the period to which the return relates the trustees or managers were able to identify which of the units under the scheme were held within individual pension accounts, and
(b) that at no time in that period have the trustees or managers imposed any charge on, or recovered any amount from, an IPA unit holder which included an amount directly or indirectly attributable to tax payable by the trustees under this Part of this Schedule.

(3) In sub-paragraph (2), "IPA unit holder" means—

(a) a person acquiring, or who has acquired, a unit under the unit trust scheme, where the unit is to be held within an individual pension account,
(b) a person holding a unit under the scheme, where the unit is held within an individual pension account, or
(c) a person surrendering, or who has surrendered, a unit under the scheme, where immediately before the surrender the unit is or was held within an individual pension account.

(4) In this paragraph—
individual pension account" has the same meaning as in regulations under section 638A of the Taxes Act 1988 (as at 6th April 2001, see regulation 4 of the Personal Pension Schemes (Restriction on Discretion to Approve) (Permitted Investments) Regulations 2001);
the relevant monthly tax return", in the case of any surrender, means the notice required by regulations under section 98 of the Finance Act 1986 to be given by the managers (or, failing that, the trustees) under the unit trust scheme to the Commissioners of Inland Revenue containing among other things details of all surrenders in the relevant two-week period;
the relevant two-week period" has the meaning given by paragraph 4(2).".

(5) The amendment made by paragraph (3) of this Resolution shall have effect where the relevant two-week period mentioned in paragraph 4(1) of Schedule 19 to the Finance Act 1999 ends after 6th April 2001.

(6) The other amendments made by this Resolution shall have effect in relation to surrenders made or effected on or after 6th April 2001.

And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

34 STAMP DUTY RESERVE TAX (OPEN-ENDED INVESTMENT COMPANIES)

Resolved,
That—
(1) Where there are two or more classes of shares in an open-ended investment company and the company's instrument of incorporation—

(a) provides that shares of one or more of those classes ("the IPA classes") may only be held within an individual pension account, and
(b) does not make such provision in relation to shares of at least one other class,

there is no charge to stamp duty reserve tax under Part II of Schedule 19 to the Finance Act 1999 on the surrender of a share of any of the IPA classes.
(2) References in this Resolution to provisions of Schedule 19 to the Finance Act 1999 are references to those provisions as they have effect in relation to open-ended investment companies by virtue of regulations from time to time in force under section 152 of the Finance Act 1995.
(3) In this Resolution—
individual pension account" has the same meaning as it has in regulations from time to time in force under section 638A of the Income and Corporation Taxes Act 1988;
open-ended investment company" has the meaning given by paragraph 14(2) of Schedule 19 to the Finance Act 1999;
surrender", in relation to a share in an open-ended investment company, has the same meaning as it has in Part II of Schedule 19 to the Finance Act 1999.
(4) This Resolution shall have effect in relation to surrenders made or effected on or after 6th April 2001.
And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

35 PETROLEUM REVENUE TAX

Resolved,
That provision may be made for the purposes of petroleum revenue tax about—

(a) the expenditure allowable under section 3 of the Oil Taxation Act 1975; and
(b) the amounts allowable as unrelievable field losses.

36 LANDFILL TAX (RATE)

Motion made, and Question put,
That—

(1) In section 42(1)(a) and (2) of the Finance Act 1996, for "£l1" there shall be substituted "£12".
(2) This Resolution has effect in relation to taxable disposals made, or treated as made, on or after 1st April 2001.

And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

The House divided: Ayes 359, Noes 146.

Division No 149]
[10.30 pm


AYES


Abbott, Ms Diane
Coffey, Ms Ann


Ainger, Nick
Coleman, Iain


Ainsworth, Robert (Cov'try NE)
Colman, Tony


Alexander, Douglas
Connarty, Michael


Allan, Richard
Cook, Frank (Stockton N)


Allen, Graham
Cook, Rt Hon Robin (Livingston)


Anderson, Rt Hon Donald (Swansea E)
Corbett, Robin



Corbyn, Jeremy


Anderson, Janet (Rossendale)
Corston, Jean


Armstrong, Rt Hon Ms Hilary
Cotter, Brian


Ashdown, Rt Hon Paddy
Cousins, Jim


Ashton, Joe
Cranston, Ross


Atkins, Charlotte
Crausby, David


Austin, John
Cryer, Mrs Ann (Keighley)


Bailey, Adrian
Cryer, John (Hornchurch)


Baker, Norman
Cunningham, Rt Hon Dr Jack (Copeland)


Ballard, Jackie



Banks, Tony
Cunningham, Jim (Cov'try S)


Barnes, Harry
Dalyell, Tarn


Bayley, Hugh
Darling, Rt Hon Alistair


Beckett, Rt Hon Mrs Margaret
Darvill, Keith


Begg, Miss Anne
Davey, Edward (Kingston)


Beith, Rt Hon A J
Davey, Valerie (Bristol W)


Benn, Hilary (Leeds C)
Davidson, Ian


Benn, Rt Hon Tony (Chesterfield)
Davies, Rt Hon Denzil (Llanelli)


Bennett, Andrew F
Dawson, Hilton


Benton, Joe
Dean, Mrs Janet


Bermingham, Gerald
Denham, Rt Hon John


Berry, Roger
Dismore, Andrew


Best, Harold
Dobbin, Jim


Blackman, Liz
Dobson, Rt Hon Frank


Blears, Ms Hazel
Donohoe, Brian H


Blunkett, Rt Hon David
Doran, Frank


Boateng, Rt Hon Paul
Dowd, Jim


Bradley, Keith (Withington)
Dunwoody, Mrs Gwyneth


Bradley, Peter (The Wrekin)
Eagle, Maria (L'pool Garston)


Bradshaw, Ben
Edwards, Huw


Brake, Tom
Efford, Clive


Brand, Dr Peter
Ellman, Mrs Louise


Breed, Colin
Etherington, Bill


Brown, Rt Hon Gordon (Dunfermline E)
Ewing, Mrs Margaret



Fearn, Ronnie


Brown, Russell (Dumfries)
Field, Rt Hon Frank


Browne, Desmond
Fisher, Mark


Buck, Ms Karen
Fitzpatrick, Jim


Burden, Richard
Fitzsimons, Mrs Lorna


Burgon, Colin
Flint, Caroline


Burstow, Paul
Flynn, Paul


Byers, Rt Hon Stephen
Foster, Rt Hon Derek


Cable, Dr Vincent
Foster, Don (Bath)


Caborn, Rt Hon Richard
Foster, Michael J (Worcester)


Campbell, Mrs Anne (C'bridge)
Foulkes, George


Campbell, Rt Hon Menzies (NE Fife)
Galloway, George



Gardiner, Barry


Campbell, Ronnie (Blyth V)
George, Andrew (St Ives)


Campbell-Savours, Dale
Gerrard, Neil


Cann, Jamie
Gidley, Sandra


Caplin, Ivor
Gilroy, Mrs Linda


Casate, Roger
Godman, Dr Norman A


Caton, Martin
Godsiff, Roger


Cawsey, Ian
Goggins, Paul


Chaytor, David
Golding, Mrs Llin


Chidgey, David
Gorrie, Donald


Clapham, Michael
Griffiths, Jane (Reading E)


Clark, Rt Hon Dr David (S Shields)
Griffiths, Win (Bridgend)


Clark, Dr Lynda (Edinburgh Pentlands)
Hain, Peter



Hall, Mike (Weaver Vale)


Clark, Paul (Gillingham)
Hall, Patrick (Bedford)


Clarke, Charles (Norwich S)
Hancock, Mike


Clarke, Rt Hon Tom (Coatbridge)
Hanson, David


Clelland, David
Harman, Rt Hon Ms Harriet


Clwyd, Ann
Harris, Dr Evan


Coaker, Vernon
Harvey, Nick






Healey, John
McNulty, Tony


Heath, David (Somerton & Frome)
Mactaggart, Fiona


Henderson, Doug (Newcastle N)
McWilliam, John


Hendrick, Mark
Mahon, Mrs Alice


Heppell, John
Mallaber, Judy


Hesford, Stephen
Mandelson, Rt Hon Peter


Hill, Keith
Marsden, Gordon (Blackpool S)


Hinchliffe, David
Marsden, Paul (Shrewsbury)


Hodge, Ms Margaret
Marshall, Jim (Leicester S)


Hoey, Kate
Marshall-Andrews, Robert


Home Robertson, John
Martlew, Eric


Hood, Jimmy
Maxton, John


Hoon, Rt Hon Geoffrey
Meacher, Rt Hon Michael


Hope, Phil
Meale, Alan


Hopkins, Kelvin
Merron, Gillian


Howarth, Rt Hon Alan (Newport E)
Michael, Rt Hon Alun


Howells, Dr Kim
Michie, Bill (Shef'ld Heeley)


Hughes, Ms Beverley (Stretford)
Michie, Mrs Ray (Argyll & Bute)


Hughes, Kevin (Doncaster N)
Milburn, Rt Hon Alan


Hughes, Simon (Southwark N)
Miller, Andrew


Humble, Mrs Joan
Mitchell, Austin


Hutton, John
Moonie, Dr Lewis


Iddon, Dr Brian
Moore, Michael


Illsley, Eric
Moran, Ms Margaret


Jackson, Ms Glenda (Hampstead)
Morgan, Alasdair (Galloway)


Jackson, Helen (Hillsborough)
Morgan, Ms Julie (Cardiff N)


Jenkins, Brian
Morley, Elliot


Johnson, Alan (Hull W & Hessle)
Morris, Rt Hon Sir John (Aberavon)


Johnson, Miss Melanie (Welwyn Hatfield)




Mudie, George


Jones, Rt Hon Barry (Alyn)
Mullin, Chris


Jones, Ms Jenny (Wolverh'ton SW)
Murphy, Rt Hon Paul (Torfaen)



Naysmith, Dr Doug


Jones, Jon Owen (Cardiff C)
Oaten, Mark


Jones, Dr Lynne (Selly Oak)
O'Brien, Bill (Normanton)


Jones, Martyn (Clwyd S)
O'Hara, Eddie


Jones, Nigel (Cheltenham)
Olner, Bill


Jowell, Rt Hon Ms Tessa
O'Neill, Martin


Joyce, Eric
Öpik, Lembit


Kaufman, Rt Hon Gerald
Organ, Mrs Diana


Keeble, Ms Sally
Osborne, Ms Sandra


Keen, Alan (Feltham & Heston)
Palmer, Dr Nick


Keen, Ann (Brentford & Isleworth)
Pearson, Ian


Keetch, Paul
Pendry, Rt Hon Tom


Kemp, Fraser
Pike, Peter L


Kennedy, Jane (Wavertree)
Plaskitt, James


Kitfoyle, Peter
Pond, Chris


King, Andy (Rugby & Kenilworth)
Pope, Greg


King, Ms Oona (Bethnal Green)
Pound, Stephen


Kirkwood, Archy
Prentice, Ms Bridget (Lewisham E)


Kumar, Dr Ashok
Prentice, Gordon (Pendle)


Ladyman, Dr Stephen
Primarolo, Dawn


Lammy, David
Prosser, Gwyn


Lawrence, Mrs Jackie
Purchase Ken


Laxton, Bob
Quinn, Lawrie


Lepper, David
Radice, Rt Hon Giles


Leslie, Christopher
Rapson, Syd


Levitt, Tom
Raynsford, Nick


Lewis, Ivan (Bury S)
Reed, Andrew (Loughborough)


Liddell, Rt Hon Mrs Helen
Reid, Rt Hon Dr John (Hamilton N)


Linton, Martin
Rendel, David


Livsey, Richard
Robertson, John (Glasgow Anniesland)


Lloyd, Tony (Manchester C)



Llwyd, Elfyn
Robinson Geoffrey (Cov'try NW)


Lock, David
Roche, Mrs Barbara


Love, Andrew
Rogers, Allan


McAvoy, Thomas
Rooker, Rt Hon Jeff


McCabe, Steve
Rooney, Terry


McCafferty, Ms Chris
Ross, Emie (Dundee W)


McDonagh, Siobhain
Rowlands, Ted


Macdonald, Calum
Roy, Frank


McFall, John
Ruane, Chris


McGuire, Mrs Anne
Ruddock, Joan


McIsaac, Shona
Russell, Bob (Colchester)


McKenna, Mrs Rosemary
Russell, Ms Christine (Chester)


Maclennan, Rt Hon Robert
Ryan, Ms Joan





Sanders, Adrian
Thomas, Simon (Ceredigion)


Sarwar, Mohammad
Timms, Stephen


Sedgemore, Brian
Tipping, Paddy


Shaw, Jonathan
Todd, Mark


Sheerman, Barry
Tonge, Dr Jenny


Sheldon, Rt Hon Robert
Touhig, Don


Shipley, Ms Debra
Truswell, Paul


Short, Rt Hon Clare
Turner, Dennis (Wolverh'ton SE)


Simpson, Alan (Nottingham S)
Turner, Dr Desmond (Kemptown)


Skinner, Dennis
Twigg, Derek (Halton)


Smith, Rt Hon Andrew (Oxford E)
Twigg, Stephen (Enfield)


Smith, Rt Hon Chris (Islington S)
Tyler, Paul


Smith, Jacqui (Redditch)
Walley, Ms Joan


Smith, Llew (Blaenau Gwent)
Ward, Ms Claire


Smith, Sir Robert (W Ab'd'ns)
Wareing, Robert N


Snape, Peter
Watts, David


Spellar, John
Webb, Steve


Squire, Ms Rachel
Welsh, Andrew


Starkey, Dr Phyllis
White, Brian


Steinberg, Gerry
Whitehead, Dr Alan


Stevenson, George
Wicks, Malcolm


Stewart, David (Inverness E)
Wigley, Rt Hon Dafydd


Stewart, Ian (Eccles)
Williams, Rt Hon Alan (Swansea W)


Strang, Rt Hon Dr Gavin



Straw, Rt Hon Jack
Williams, Alan W (E Carmarthen)


Stringer, Graham
Williams, Mrs Betty (Conwy)


Stuart, Ms Gisela
Willis, Phil


Stunell, Andrew
Wills, Michael


Sutcliffe, Gerry
Wilson, Brian


Swinney, John
Winnick, David


Taylor, Rt Hon Mrs Ann (Dewsbury)
Worthington, Tony



Wray, James


Taylor, Ms Dari (Stockton S)
Wright, Anthony D (Gt Yarmouth)


Taylor, David (NW Leics)
Wright, Tony (Cannock)


Taylor, Matthew (Truro)



Temple-Morris, Peter
Tellers for the Ayes:


Thomas, Gareth (Clwyd W)
Mr. David Jamieson and


Thomas, Gareth R (Harrow W)
Mr. Clive Betts.


NOES


Ainsworth, Peter (E Surrey)
Dorrell, Rt Hon Stephen


Amess, David
Duncan, Alan


Ancram, Rt Hon Michael
Duncan Smith, Iain


Arbuthnot, Rt Hon James
Emery, Rt Hon Sir Peter


Atkinson, David (Bour'mth E)
Evans, Nigel


Atkinson, Peter (Hexham)
Fabricant, Michael


Baldry, Tony
Fallon, Michael


Bell, Martin (Tatton)
Flight, Howard


Bercow, John
Fowler, Rt Hon Sir Norman


Beresford, Sir Paul
Fox, Dr Liam


Blunt, Crispin
Fraser, Christopher


Boswell, Tim
Gale, Roger


Bottomley, Peter (Worthing W)
Garnier, Edward


Bottomley, Rt Hon Mrs Virginia
Gibb, Nick


Brady, Graham
Gill, Christopher


Brooke, Rt Hon Peter
Gillan, Mrs Cheryl


Browning, Mrs Angela
Gorman, Mrs Teresa


Bruce, Ian (S Dorset)
Green, Damian


Burns, Simon
Greenway, John


Butterfill, John
Grieve, Dominic


Cash, William
Gummer, Rt Hon John


Chapman, Sir Sydney (Chipping Barnet)
Hague, Rt Hon William



Hamilton, Rt Hon Sir Archie


Chope, Christopher
Hammond, Philip


Clappison, James
Hawkins, Nick


Clark, Dr Michael (Rayleigh)
Hayes, John


Clarke, Rt Hon Kenneth (Rushcliffe)
Heald, Oliver



Heath, Rt Hon Sir Edward


Clifton-Brown, Geoffrey
Heathcoat-Amory, Rt Hon David


Collins, Tim
Hogg, Rt Hon Douglas


Cormack, Sir Patrick
Horam, John


Cran, James
Howarth, Gerald (Aldershot)


Curry, Rt Hon David
Jack, Rt Hon Michael


Davis, Rt Hon David (Haltemprice)
Jackson, Robert (Wantage)


Day, Stephen
Jenkin, Bernard


Donaldson, Jeffrey
Key, Robert






Kirkbride, Miss Julie
St Aubyn, Nick


Laing, Mrs Eleanor
Sayeed, Jonathan


Lait, Mrs Jacqui
Shephard, Rt Hon Mrs Gillian


Lansley, Andrew
Shepherd, Richard


Leigh, Edward
Simpson, Keith (Mid-Norfolk)


Letwin, Oliver
Smyth, Rev Martin (Belfast S)


Lilley, Rt Hon Peter
Spelman, Mrs Caroline


Lloyd, Rt Hon Sir Peter (Fareham)
Spicer, Sir Michael


Loughton, Tim
Spring, Richard


Luff, Peter
Stanley, Rt Hon Sir John


Lyell, Rt Hon Sir Nicholas
Steen, Anthony


McCrea, Dr William
Swayne, Desmond


MacGregor, Rt Hon John
Syms, Robert


McIntosh, Miss Anne
Tapsell, Sir Peter


MacKay, Rt Hon Andrew
Taylor, Ian (Esher & Walton)


Maclean, Rt Hon David
Taylor, Rt Hon John D (Strangford)


McLoughlin, Patrick
Taylor, John M (Solihull)


Madel, Sir David
Taylor, Sir Teddy


Malins, Humfrey
Thompson, William


Maples, John
Townend, John


Maude, Rt Hon Francis
Tredinnick, David


Mawhinney, Rt Hon Sir Brian
Trend, Michael


May, Mrs Theresa
Tyrie, Andrew


Moss, Malcolm
Walter, Robert


Nicholls, Patrick
Waterson, Nigel


Norman, Archie
Wells, Bowen


O'Brien, Stephen (Eddisbury)
Whitney, Sir Raymond


Ottaway, Richard
Whittingdale, John


Paice, James
Widdecombe, Rt Hon Miss Ann


Paterson, Owen
Wilkinson, John


Pickles, Eric
Willetts, David


Portillo, Rt Hon Michael
Wilshire, David


Prior, David
Winterton, Mrs Ann (Congleton)


Redwood, Rt Hon John
Winterton, Nicholas (Macclesfield)


Robathan, Andrew
Yeo, Tim


Robertson, Laurence (Tewk'b'ry)
Young, Rt Hon Sir George


Robinson, Peter (Belfast E)



Roe, Mrs Marion (Broxbourne)
Tellers for the Noes:


Ross, William (E Lond'y)
Mr. John Randall and


Ruffley, David
Mr. James Gray.

Question accordingly agreed to.

37 CLIMATE CHANGE LEVY

Resolved,
That—
(1) In Schedule 6 to the Finance Act 2000, after paragraph 11 there shall be inserted—

"Exemption: supplies by Northern Ireland gas utilities
11A. A supply of any gas is exempt from the levy if—

(a) the supply is made by a gas utility, and
(b) the person to whom the supply is made intends to cause the gas to be burned in Northern Ireland.".

(2) In paragraph 14(2) of that Schedule, at the end there shall be inserted ", and
(c) uses the electricity produced otherwise than in exemption-retaining ways.".
(3) For paragraph 14(3)(c) of that Schedule, there shall be substituted
(c) uses the electricity produced otherwise than in exemption-retaining ways.".
(4) In paragraph 14 of that Schedule, after sub-paragraph (3) there shall be inserted—
(3A) For the purposes of this paragraph, electricity is used in an "exemption-retaining" way if it is used—

(a) in making supplies that are excluded under paragraphs 8 to 10 or exempt under any of paragraphs 11, 12 and 18, or
(b) in any of the ways mentioned in sub-paragraphs (i) to (iv) of paragraph 13(b).".


(5) In paragraph 15 of that Schedule—

(a) in sub-paragraph (1)(a), for "the commodity is to be used by that person" there shall be substituted "that person intends to cause the commodity to be used"; and
(b) in sub-paragraph (2)(b), the words "by that person" shall be omitted.

(6) This Resolution shall have effect in relation to supplies made on or after 1st April 2001.
And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

38 RELIEF FROM TAX (INCIDENTAL AND CONSEQUENTIAL CHARGES)

Resolved,
That it is expedient to authorise any incidental or consequential charges to any duty or tax (including charges having retrospective effect) which may arise from provisions designed in general to afford relief from taxation.

PROCEDURE (REMEDIATION OF CONTAMINATED LAND)

Resolved,
That, notwithstanding anything to the contrary in the practice of the House relating to the matters that may be included in Finance Bills, any Finance Bill of the present Session may contain provision for allowing the making of payments in respect of the surrender of losses the amounts of which are determined by reference to expenditure incurred in connection with the remediation of contaminated land.

PROCEDURE (TRADING FUNDS: LIMITS ON BORROWING AND PUBLIC DIVIDEND CAPITAL)

Resolved,
That, notwithstanding anything to the contrary in the practice of the House relating to the matters that may be included in Finance Bills, any Finance Bill of the present Session may contain provision amending section 2C(3) and (4) of the Government Trading Funds Act 1973.

PROCEDURE (FUTURE TAXATION)

Resolved,
That, notwithstanding anything to the contrary in the practice of the House relating to the matters that may be included in Finance Bills, any Finance Bill of the present Session may contain the following provisions taking effect in a future year—

(a) provision about children's tax credit;
(b) provision for corporation tax to be charged for the financial year 2002;
(c) provision about mileage allowances;
(d) provision withdrawing capital allowances in respect of vehicles provided by employees and office-holders;
(e) provision about works bus services;
(f) provision amending section 48(2)(a) of the Finance (No.2) Act 1997;
(g) provision as to the obligations of insurers to provide information in connection with policies of life assurance, contracts for life annuities and capital redemption policies; and
(h) provision relating to Schedule 19AB to the Income and Corporation Taxes Act 1988 as applied in relation to provisional repayments to insurance companies and friendly societies in respect of tax credits.

FINANCE [Money]

Queen's Resommendation having been signified—

Resolved,
That, for the purposes of any Act resulting from the Finance Bill, it is expedient to authorise—

(a) the payment out of money provided by Parliament of sums payable by the Secretary of State by virtue of provisions of that Act relating to vehicle excise and registration;
(b) the deduction of sums from the gross revenues of the department of the Commissioners of Inland Revenue for the purpose of making payments in respect of the surrender of losses the amounts of which are determined by reference to expenditure incurred in connection with the remediation of contaminated land; and
(c) any increase in the sums—

(i) payable out of the National Loans Fund or out of money provided by Parliament, or
(ii) payable into the National Loans Fund or the Consolidated Fund,

that is attributable to any provisions of that Act relating to limits on the borrowing and public dividend capital of trading funds.

Bill ordered to be brought in upon the foregoing resolutions: And that the Chairman of Ways and Means, Mr. Chancellor of the Exchequer, Mr. Secretary Prescott, Mr. Secretary Straw, Mr. Secretary Blunkett, Mr. Secretary Darling, Mr. Secretary Byers, Mr. Secretary Milburn, Mr. Andrew Smith, Dawn Primarolo, Miss Melanie Johnson and Mr. Stephen Timms do prepare and bring it in.

FINANCE BILL

Mr. Stephen Timms: accordingly presented a Bill to grant certain duties, to alter other duties, and to amend the law relating to the National Debt and the Public Revenue, and to make further provision in connection with Finance: And the same was read the First time; and ordered to be read a Second time tomorrow, and to be printed [Bill 63].

BUSINESS OF THE HOUSE

Motion made, and Question put forthwith, pursuant to Standing Order No. 15 (Exempted business),

That, at this day's sitting, the Business of the House Motion in the name of Margaret Beckett, and the Motions on Sittings in Westminster Hall and Delegated Legislation may be proceeded with, though opposed, until any hour.—[Mr. Clelland.]

Question agreed to.

Mr. Andrew Dismore: On a point of order, Mr. Deputy Speaker. I beg to move, That the House sit in private.

Question put forthwith, pursuant to Standing Order No. 163 (House to sit in private):—

The House divided: Ayes 0, Noes 364.

Division No. 150]
[10.46 pm


AYES


Tellers for the Ayes:



Mr. Andrew Dismore and



Mr. Keith Darvill.



NOES


Abbott, Ms Diane
Allan, Richard


Anger, Nick
Allen, Graham


Ainsworth, Robert (Cov'try NE)
Anderson, Rt Hon Donald (Swansea E)


Alexander, Douglas






Anderson, Janet (Rossendale)
Corbyn, Jeremy


Armstrong, Rt Hon Ms Hilary
Corston, Jean


Ashdown, Rt Hon Paddy
Cotter, Brian


Ashton, Joe
Cousins, Jim


Atkins, Charlotte
Cranston, Ross


Austin, John
Crausby, David


Bailey, Adrian
Cryer, Mrs Ann (Keighley)


Baker, Norman
Cryer, John (Hornchurch)


Ballard, Jackie
Cunningham, Rt Hon Dr Jack (Copeland)


Banks, Tony



Barnes, Harry
Cunningham, Jim (Cov'try S)


Bayley, Hugh
Dalyell, Tam


Beckett, Rt Hon Mrs Margaret
Darling, Rt Hon Alistair


Begg, Miss Anne
Davey, Edward (Kingston)


Beggs, Roy
Davey, Valerie (Bristol W)


Berth, Rt Hon A J
Davidson, Ian


Bell, Martin (Tatton)
Davies, Rt Hon Denzil (Llanelli)


Benn, Hilary (Leeds C)
Dawson, Hilton


Benn, Rt Hon Tony (Chesterfield)
Dean, Mrs Janet


Benton, Joe
Denham, Rt Hon John


Bermingham, Gerald
Dobbin, Jim


Berry, Roger
Dobson, Rt Hon Frank


Best, Harold
Donaldson, Jeffrey


Belts, Clive
Donohoe, Brian H


Blackman, Liz
Doran, Frank


Blears, Ms Hazel
Dowd, Jim


Boateng, Rt Hon Paul
Drew, David


Bradley, Keith (Withington)
Eagle, Maria (L'pool Garston)


Bradley, Peter (The Wrekin)
Efford, Clive


Bradshaw, Ben
Ellman, Mrs Louise


Brake, Tom
Etherington, Bill


Brand, Dr Peter
Ewing, Mrs Margaret


Breed, Colin
Fearn, Ronnie


Brown, Rt Hon Gordon (Dunfermline E)
Fisher, Mark



Fitzpatrick, Jim


Brown, Russell (Dumfries)
Fitzsimons, Mrs Lorna


Browne, Desmond
Flint, Caroline


Bruce, Malcolm (Gordon)
Flynn, Paul


Buck, Ms Karen
Foster, Rt Hon Derek


Burden, Richard
Foster, Don (Bath)


Burgon, Colin
Foster, Michael J (Worcester)


Burnett, John
Galloway, George


Burstow, Paul
Gardiner, Barry


Butler, Mrs Christine
George, Andrew (St Ives)


Byers, Rt Hon Stephen
Gerrard, Neil


Cable, Dr Vincent
Gidley, Sandra


Caborn, Rt Hon Richard
Gilroy, Mrs Linda


Campbell, Mrs Anne (C'bridge)
Godman, Dr Norman A


Campbell, Rt Hon Menzies (NE Fife)
Godsiff, Roger



Goggins, Paul


Campbell, Ronnie (Blyth V)
Golding, Mrs Llin


Campbell-Savours, Dale
Gorrie, Donald


Cann, Jamie
Griffiths, Jane (Reading E)


Caplin, Ivor
Griffiths, Win (Bridgend)


Casale, Roger
Hain, Peter


Caton, Martin
Hall, Mike (Weaver Vale)


Cawsey, Ian
Hall, Patrick (Bedford)


Chaytor, David
Hamilton, Rt Hon Sir Archie


Chidgey, David
Hancock, Mike


Clapham, Michael
Hanson, David


Clark, Rt Hon Dr David (S Shields)
Harman, Rt Hon Ms Harriet


Clark, Dr Lynda (Edinburgh Pentlands)
Harris, Dr Evan



Harvey, Nick


Clark, Paul (Gillingham)
Healey, John


Clarke, Charles (Norwich S)
Heath, David (Somerton & Frome)


Clarke, Rt Hon Tom (Coatbridge)
Henderson, Doug (Newcastle N)


Clelland, David
Hendrick, Mark


Clwyd, Ann
Hepburn, Stephen


Coaker, Vernon
Heppell, John


Coffey, Ms Ann
Hesford, Stephen


Coleman, Iain
Hill, Keith


Colman, Tony
Hinchliffe, David


Connarty, Michael
Hodge, Ms Margaret


Cook, Frank (Stockton N)
Hoey, Kate


Cook, Rt Hon Robin (Livingston)
Home Robertson, John


Corbett, Robin
Hood, Jimmy






Hoon, Rt Hon Geoffrey
McDonagh, Siobhain


Hope, Phil
Macdonald, Calum


Hopkins, Kelvin
McFall, John


Howarth, Rt Hon Alan (Newport E)
McGuire, Mrs Anne


Howells, Dr Kim
McIsaac, Shona


Hughes, Ms Beverley (Stretford)
McKenna, Mrs Rosemary


Hughes, Kevin (Doncaster N)
Maclennan, Rt Hon Robert


Humble, Mrs Joan
McNulty, Tony


Hurst Alan
MacShane, Denis


Hutton, John
Mactaggart, Fiona


Iddon, Dr Brian
Mahon, Mrs Alice


Illsley, Eric
Mallaber, Judy


Jackson, Ms Glenda (Hampstead)
Mandelson, Rt Hon Peter


Jackson, Helen (Hillsborough)
Marsden, Gordon (Blackpool S)


Jamieson, David
Marsden, Paul (Shrewsbury)


Jenkins, Brian
Marshall, Jim (Leicester S)


Johnson, Alan (Hull W & Hessle)
Martlew, Eric


Johnson, Miss Melanie (Welwyn Hatfield)
Maxton, John



Meacher, Rt Hon Michael


Jones, Rt Hon Barry (Alyn)
Meale, Alan


Jones, Ms Jenny (Wolverh'ton SW)
Merron, Gillian



Michael, Rt Hon Alun


Jones, Jon Owen (Cardiff C)
Michie, Bill (Shef'ld Heeley)


Jones, Martyn (Clwyd S)
Michie, Mrs Ray (Argyll & Bute)


Jones, Nigel (Cheltenham)
Milburn, Rt Hon Alan


Jowell, Rt Hon Ms Tessa
Miller, Andrew


Joyce, Eric
Mitchell, Austin


Kaufman, Rt Hon Gerald
Moonie, Dr Lewis


Keeble, Ms Sally
Moore, Michael


Keen, Alan (Feltham & Heston)
Moran, Ms Margaret


Keen, Ann (Brentford & Isleworth)
Morgan, Alasdair (Galloway)


Keetch, Paul
Morgan, Ms Julie (Cardiff N)


Kennedy, Jane (Wavertree)
Mortey, Elliot


Kilfoyle, Peter
Morris, Rt Hon Sir John (Aberavon)


King, Andy (Rugby & Kenilworth)



King, Ms Oona (Bethnal Green)
Mudie, George


Kirkwood, Archy
Mullin, Chris


Kumar, Dr Ashok
Murphy, Rt Hon Paul (Torfaen)


Ladyman, Dr Stephen
Naysmith, Dr Doug


Lammy, David
Oaten, Mark


Lawrence, Mrs Jackie
O'Brien, Bill (Normanton)


Laxton, Bob
O'Brien, Mike (N Warks)


Lepper, David
O'Hara, Eddie


Leslie, Christopher
Olner, Bill


Levitt, Tom
O'Neill, Martin


Lewis, Ivan (Bury S)
Öpik, Lembit


Liddell, Rt Hon Mrs Helen
Organ, Mrs Diana


Linton, Martin
Osborne, Ms Sandra


Livsey, Richard
Palmer, Dr Nick


Lloyd, Tony (Manchester C)
Pearson, Ian


Llwyd, Elfyn
Pendry, Rt Hon Tom


Lock, David
Pike, Peter L


Love, Andrew
Plaskitt, James


McAvoy, Thomas
Pond, Chris


McCabe, Steve
Pope, Greg


McCafferty, Ms Chris
Pound, Stephen


McCrea, Dr William
Prentice, Ms Bridget (Lewisham E)





Prentice, Gordon (Pendle)
Stringer, Graham


Primarolo, Dawn
Stuart, Ms Gisela


Prosser, Gwyn
Stunell, Andrew


Purchase, Ken
Sutcliffe, Gerry


Rapson, Syd
Swinney, John


Raynsford, Nick
Taylor, Rt Hon Mrs Ann (Dewsbury)


Reed, Andrew (Loughborough)



Reid, Rt Hon Dr John (Hamilton N)
Taylor, Ms Dari (Stockton S)


Rendel, David
Taylor, David (NW Leics)


Robertson, John (Glasgow Anniesland)
Taylor, Rt Hon John D (Strangford)



Taylor, Matthew (Truro)


Robinson, Geoffrey (Cov'try NW)
Temple-Morris, Peter


Robinson, Peter (Belfast E)
Thomas, Gareth (Clwyd W)


Roche, Mrs Barbara
Thomas, Gareth R (Harrow W)


Rogers Allan
Thomas, Simon (Ceredigion)


Rooker, Rt Hon Jeff
Thompson, William


Rooney, Terry
Timms, Stephen


Ross, Ernie (Dundee W)
Tipping, Paddy


Ross, William (E Lond'y)
Todd, Mark


Rowlands, Ted
Tonge, Dr Jenny


Roy, Frank
Touhig, Don


Ruane, Chris
Trickett, Jon


Ruddock, Joan
Truswell, Paul


Russell, Bob (Colchester)
Turner, Dennis (Wolverh'ton SE)


Russell, Ms Christine (Chester)
Turner, Dr Desmond (Kemptown)


Ryan, Ms Joan
Twigg Derek (Halton)


Sanders, Adrian
Twigg, Stephen (Enfield)


Sarwar, Mohammad
Tyler, Paul


Sedgemore, Brian
Walley, Ms Joan


Shaw, Jonathan
Ward, Ms Claire



Wareing, Robert N


Sheerman, Barry
Watts, David


Sheldon, Rt Hon Robert
Webb, Steve


Shepherd, Richard
Welsh, Andrew


Shipley, Ms Debra
White, Brian


Simpson, Alan (Nottingham S)
Whitehead, Dr Alan


Skinner, Dennis
Wicks, Malcolm


Smith, Rt Hon Andrew (Oxford E)
Wigley, Rt Hon Dafydd


Smith, Rt Hon Chris (Islington S)
Williams, Rt Hon Alan (Swansea W)


Smith, Jacqui (Redditch)



Smith, Llew (Blaenau Gwent)
Williams, Alan W (E Carmarthen)


Smith, Sir Robert (W Ab'd'ns)
Williams, Mrs Betty (Conwy)


Smyth, Rev Martin (Belfast S)
Willis, Phil


Snape, Peter
Wills, Michael


Spellar, John
Wilson, Brian


Squire, Ms Rachel
Winterton, Nicholas (Macclesfield)


Starkey, Dr Phyllis
Worthington, Tony


Steinberg, Gerry
Wray, James


Stevenson, George
Wright, Anthony D (Gt Yarmouth)


Stewart, David (Inverness E)



Stewart, Ian (Eccles)
Tellers for the Noes:


Strang, Rt Hon Dr Gavin
Mr. Lawrie Quinn and


Straw, Rt Hon Jack
Mr. John McWilliam.

Question accordingly negatived.

Orders of the Day — Prevention and Suppression of Terrorism

The Secretary of State for the Home Department (Mr. Jack Straw): I beg to move,
That the draft Terrorism Act 2000 (Proscribed Organisations) (Amendment) Order 2001, which was laid before this House on 28th February, be approved.
The Terrorism Act 2000 was passed by this House and the other place with very wide support, and came into force on 19 February. It provides new permanent and United Kingdom-wide legislation that is proportionate to the threat that the UK faces, and may face, from all forms of terrorism.
The Terrorism Act 2000 brings our provisions into line with the European convention on human rights and ensures that we are better able to deal with the serious threat that terrorism poses.
My right hon. and hon. Friends will recall that during the many debates on the Prevention of Terrorism (Temporary Provisions) Acts in previous Parliaments, particular concern was expressed about the fact that the Executive had power to extend detentions and also about exclusion orders. Changes were made to both those provisions under the Terrorism Act 2000. Under the 2000 Act, extensions of detention are now handled and have to be decided by members of the judiciary, and the provisions for exclusion orders were not included in the new Act. As a result, the derogations that the Government had to extend to the European convention on human rights and the international covenant on civil and political rights because our provisions were not in line with our international obligations were lifted on 26 February 2001.
At the same time, when the 2000 Act came into force, we were able to ratify the remaining two of the 12 extant United Nations conventions relating to terrorism—the convention for the suppression of terrorist bombings and the convention for the suppression of the financing of terrorism. Our obligations, therefore are in respect of human rights and the liberty of the subject—even where those subjects have been involved in terrorism—which is entirely proper. They are also in respect of significant United Nations conventions obliging all signatories to take better steps against terrorism.
An important part of the Act that came into force on 19 February makes available, for the first time, the power to enable the Secretary of State to proscribe terrorist organisations concerned in international or domestic terrorism, and not just those concerned only in terrorism connected with the affairs of Northern Ireland. Organisations that had previously bean proscribed under the earlier legislation in respect of Northern Ireland were proscribed by schedule 2 to the Act, and they remain so proscribed. In passing the Terrorism Bill into law, Parliament gave its support to extending the proscription regime in this way.
We discussed at some length why it was necessary to extend proscription. The view that this House and the other place accepted—it is the view of the Government—was that such powers were necessary to ensure that the United Kingdom did not become, or continue to be, a base for international terrorists or their supporters.
The draft order that we are debating—the Terrorism Act 2000 (Proscribed Organisations) (Amendment) Order 2001—was laid before Parliament on 28 February. It lists

21 international terrorist organisations which, in my considered judgment, should be subject to proscription in the United Kingdom.

Mr. Douglas Hogg: The right hon. Gentleman has made it plain that there are 21 organisations which he thinks should be proscribed. I thought that there were 23, but we will not argue about that. I have read, as no doubt have many other right hon. and hon. Members, the letter dated 28 February which explains the process. Will the right hon. Gentleman say, in relation to each organisation that is identified as "to be proscribed", whether he has satisfied himself that there is sufficient evidence from the intelligence agencies or elsewhere to justify the assertions of fact set out in the list with which we have been provided? Otherwise, we do not know the basis on which we are being asked to make a proscription.

Mr. Straw: The answer to the right hon. and learned Gentleman's question is yes. I went through the documentation and submissions at considerable length. I devoted a lot of time to them, as it was necessary and proper to do. We were under no obligation to provide any details about why I had reached that judgment, but the Minister of State, Home Office, my hon. Friend the Member for Norwich, South (Mr. Clarke) and I believed that it would be convenient for the House if we provided a synopsis of such information as we could make public concerning my reasons for coming to those conclusions.

Mr. Menzies Campbell: rose—

Mr. Edward Davey: rose—

Mr. Jim Marshall: rose—

Mr. Straw: I should like to make some progress and then I will happily give way to right hon. and hon. Members on both sides of the House.
I will explain the basis for coming to those decisions. Under section 3 of the 2000 Act, I—or in the case of organisations concerned only in terrorism connected with the affairs of Northern Ireland, my right hon. Friend the Secretary of State for Northern Ireland—have the power to proscribe any organisation that I come to believe is concerned in terrorism. Under section 3,
an organisation is concerned in terrorism if it … commits or participates in acts of terrorism 7hellip; prepares for terrorism … promotes or encourages terrorism, or … is otherwise concerned in terrorism.

Mr. David Wilshire: Will the Secretary of State give way?

Mr. Straw: I will make a little progress first.
An organisation is defined in section 121 of the Act as including
any association or combination of persons.",
Having satisfied the statutory criteria in any particular case, 1 then have discretion as to which organisations should be recommended to Parliament for proscription.
In considering which such organisations should be so proscribed, I took into account a number of factors, including those indicated to Parliament by Ministers


during proceedings on the Terrorism Bill, which included the nature and scale of the organisation's activities; the specific threat that it poses to the United Kingdom; the specific threat that it poses to British nationals overseas; the extent of the organisation's presence in the UK; and the need to support other members of the international community in the global fight against terrorism.

Mr. Wilshire: Will the right hon. Gentleman give way?

Mr. Straw: I will continue for a moment and then I will do so.
Depending on the organisation concerned and its sphere of operation, certain factors will have carried more weight than others. As far as possible, however, I considered each organisation on a similar basis to ensure a consistency of approach.
As I mentioned, to assist consideration by both Houses all hon. Members and noble Lords were sent a brief summary in respect of each organisation named in the draft order. As right hon. and hon. Members will appreciate, in reaching my decisions, in addition to that information which is in the public domain, I have had access to related intelligence-based material on the various organisations and taken account of police, security and legal advice. I am entirely satisfied that the organisations that I am recommending to Parliament for proscription are "concerned in terrorism" and thus fully meet the criteria laid down in the 2000 Act.

Several hon. Members: rose—

Mr. Straw: I will give way to the right hon. and learned Member for North-East Fife (Mr. Campbell).

Mr. Menzies Campbell: Does the Secretary of State understand the discomfort that some of us feel at the notion that 21 organisations should appear in the motion that we are debating, and that there has not been an opportunity to deal with each on an individual and separate basis? In particular, does he understand the discomfort that I feel, as someone who consistently supported the terrorism legislation so far as it affected Northern Ireland that, on the subject of the 17 November Revolutionary Organisation—the last on the list—under the heading "Representation and activities in the United Kingdom", we read from the letter that
There is no indication that N17 has any representation in the UK.
In those circumstances, can the Home Secretary explain why he considers it necessary that that organisation should be proscribed?

Mr. Straw: On the first question, I understand the right hon. and learned Gentleman's point, but I suggest that, had the House and the other place wished there to be separate orders for each organisation, they would have so agreed and so proposed. As it happens, the current procedure was agreed and I suggest that it is a practical way forward. I will also draw attention to the opportunities for organisations or their representatives to

make representations to me for de-proscription and, if I refuse to accept the case for that, to appeal to an independent judicial—

Mr. Hogg: Will the right hon. Gentleman give way?

Mr. Straw: I will not. I am dealing with the second matter raised by the right hon. and learned Member for North?East Fife. He raised the fact that it states in the last sentence of the note on page 14:
There is no indication that N17 has any representation in the UK.
However, the list that I read out of the factors that I take into account, which build on the criteria in section 3 of the Act, included the specific threat that the organisation poses to British nationals overseas. As the right hon. and learned Gentleman will be aware, the previous paragraph on page 14 refers to the fact that in June 2000 N17 murdered Brigadier Stephen Saunders, the British defence attaché in Athens. The group has also carried out numerous small-scale attacks in Greece on the interests of EU and NATO members, including a rocket attack on HMS Ark Royal while it was docked at Piraeus in 1994.

Mr. David Winnick: Is my right hon. Friend aware of the possibility that mistakes could have occurred in the list? Only today, we were lobbied by one or two organisations. Does he agree that the list undoubtedly includes some of the most notorious terrorist groups? I see no reason at all why they should not be on the list. If we did not introduce such measures, it would be difficult for us to lecture other countries about terrorism—we would be allowing the United Kingdom to be a base for terrorist action.

Mr. Straw: I ant grateful to my hon. Friend for those comments. He has constantly supported the Act and has always understood that the defence of freedom requires us also to be vigilant against terrorism. I do not believe that mistakes have been made—in the end, that is, of course, a matter of judgment. Certainly, no organisation was included in the list by error or inadvertence, given the care taken by my officials and—may I say—by me. However, if an organisation feels that it has been unfairly included in the list, there is every opportunity to make representations about that—as I shall explain in more detail.

Mr. Jim Marshall: I agree with the right hon. and learned Member for North-East Fife (Mr. Campbell); it is unfortunate that we cannot debate each organisation on the list. By not doing so, we cannot differentiate between those mentioned by my hon. Friend the Member for Walsall, North (Mr. Winnick) and other organisations. I remind my right hon. Friend the Home Secretary that there is grave disquiet in the Sikh community about the inclusion of the International Sikh Youth Federation. That organisation is active in my constituency and I have been involved with it.
I have two questions. First, if an organisation applies to my right hon. Friend to be de-proscribed, will all the information available to him also be available to the organisation, so that it can make a point-by-point refutation? Secondly, will my right hon. Friend tell the House how much pressure has been put on him and the Government by the Government of India to include organisations in the prevention of terrorism list?

Mr. Straw: I shall deal with my hon. Friend's second point first. It is well known and a matter of public record


that, over the years, a large number of Governments—including the Government of India—have made representation to the British Government concerning the need for such powers. As to whether that resulted in pressure being brought to bear on me to exercise my discretion unfairly, the answer is no.
I applied myself to the evidence before me. That leads to my hon. Friend's first question. He asks whether the information on which I based my judgments—which are before the House—could be made available to organisations that make representations. The answer is no—for a very good reason. A great deal of such information cannot be placed in the public domain because it is sensitive intelligence. It may be sensible for me to explain how the process will operate both for representations for de-proscription and for appeals to the Proscribed Organisations Appeal Commission.
Any organisation seeking de-proscription can, at any time while it is subject to inclusion on the list, make representation to me, as Secretary of State. The representations do not have to be made by individuals who have a direct association with the organisation, but can be made on behalf of the organisation. That is an important protection.
Representations can be made to me We have provided a basic summary, as fairly as we can, of the facts taken into account in making the initial decision—I accept that the summary only goes into brief detail I shall consider such representations carefully. I shall of course take into account representations made in the House today, as well as any others that are made by right hon. and hon. Members. I shall then come to a decision on de-proscription. If I decide to de-proscribe, that is the end of the matter. The organisation is de-proscribed by order. The matter is not burdensome for any individual; it is subject only to the negative resolution procedure. That is straightforward. If, however, I decide to maintain the proscription, the organisation has a right of appeal to the Proscribed Organisations Appeal Commission.

Mr. Hogg: Will the right hon. Gentleman give way?

Mr. Straw: If the right hon. and learned Gentleman will allow me,I shall continue to explain how that organisation—

Mr. Hogg: After that, will the right hon. Gentleman give way?

Mr. Straw: It depends whether I have time to give way to the right hon. and learned Gentleman, given that I have already given way to him. I am normally very indulgent of his wishes, but others also want to get in.
The Proscribed Organisations Appeal Commission is a new independent judicial tribunal to consider these appeals. The commission will consider any refusals to de-proscribe in the light of judicial re view principles. The substantive basis for appeals is different from that in a parallel organisation called the Special Immigration Appeals Commission, but procedurally it has been modelled on that latter commission. That latter commission, which operates in a very similar way,

although the basis for appeal is different, has clearly demonstrated its independence from Government in the cases that it has had to consider.

Mr. Wilshire: Will the right hon. Gentleman give way?

Mr. Straw: No. If I may, I shall explain this point to the House and then give way to the hon. Gentleman.
The Special Immigration Appeals Commission exists to deal with decisions by the Home Secretary of the day to exclude individuals from this country on national security grounds, where those individuals have a right to remain in this country. After a decision is made to exclude, the individual makes an appeal. Because the decision has been made on the basis of intelligence that cannot be disclosed, the individual concerned cannot see that intelligence, but all the information must be disclosed to the independent appeal commission and a special advocate is appointed to the appeal commission, to scrutinise in very close detail—

Mr. Hogg: Not on the merits.

Mr. Straw: I am sorry, but as far as the Special Immigration Appeals Commission is concerned, it is on the merits. I have already drawn the distinction in terms

Mr. Hogg: But not on this commission.

Mr. Deputy Speaker (Mr. Michael Lord): Order. The right hon. and learned Gentleman must not intervene from a sedentary position.

Mr. Hogg: rose—

Mr. Deputy Speaker: Order.

Mr. Hogg: I am rising to—

Mr. Deputy Speaker: Order.

Mr. Hogg: I am rising to apologise, Mr. Deputy Speaker, but of course I would not have had to intervene from a sedentary position if the Home Secretary had given way.

Mr. Deputy Speaker: The occupant of the Chair does not appreciate that kind of intervention, even when it is addressed as an apology.

Mr. Straw: Thank you, Mr. Deputy Speaker. The right hon. and learned Member for Sleaford and North Hykeham (Mr. Hogg) knows very well that I do my best to give way to as many hon. Members as possible, but I have to give way to other people before I give way to him two or three times. I have already dealt with his point.

Mr. Wilshire: rose—

Mr. Jeremy Corbyn: rose—

Mr. Straw: I want to finish the point, and then I shall give way to the hon. Member for Spelthorne (Mr. Wilshire) and my hon. Friend the Member for Islington, North (Mr. Corbyn); I promise.
A special advocate appears on behalf of the individual before the SIAC or the Proscribed Organisations Appeal Commission to scrutinise all the evidence before those special commissions, and to cross-examine the witnesses who go before it. The SIAC has worked entirely independently of Government, and in at least three cases decisions that I have made to exclude people on national security grounds have been overturned, including two cases in respect of two individuals who, although they were accepted as Sikh terrorists, were not deported because the commission was not satisfied about their safety were they to be returned to India, and therefore decided not to accept my decision that they should be deported.

Mr. Wilshire: I am most grateful to the right hon. Gentleman for keeping his promise; it is exactly what I would expect of him and I do not wish to quarrel with the list that he brings here. May I take him back to his list and to the Terrorism Act 2000, because that is when I started to try to let him give me a chance to ask him this question?
I had expected to see the Real IRA on the list in the order because I knew that it was not in the Act, so I went back to the original list, where I saw the Irish Republican Army listed. I am confused and I should be most grateful if the right hon. Gentleman would help us with this matter, because I doubt whether there is anyone in the Chamber who would disagree with the assertion that the Real IRA should be a proscribed organisation. The Terrorism Act 2000 simply refers to the Irish Republican Army. Will the right hon. Gentleman tell the House what that means? Does it mean the Official IRA, the Provisional IRA, the Real IRA or the Continuity IRA? Which of them is included, or are they all? The House needs to know whether any body that may have been invented this afternoon is included, because, as the right hon. Gentleman knows, those organisations dress themselves up in any sort of name to try to show that they are not the same.

Mr. Straw: I am advised by my right hon. Friend the Secretary of State for Northern Ireland that the Real IRA is covered, as is the Provisional IRA, by the description, "the Irish Republican Army", which appears at the beginning of schedule 2 on page 64 of the Act.

Mr. Corbyn: I thank the Home Secretary for giving way. As I understand the process, he proposes to ban 21 organisations on the basis of information that he has received from the security services and, possibly, other sources, and those decisions could go to the appeal organisations that he describes. In the event that any one of those organisations attempted to take his decision, or that of the appeal commission that he has set up, to judicial review, would the security information on which he has based his initial decision be available in open court so that it could be contested, or would it be privy to himself and the judge so that the appellant organisation would not even know what the case was against it?

Mr. Straw: First, given that the criteria on which the Proscribed Organisations Appeal Commission considers whether to de-proscribe an organisation can themselves come under judicial review, it is not for me to decide—

I merely speculate—but it is unlikely that there would be grounds to seek a judicial review of the process before the administrative court. It would be hard to envisage circumstances in which the merits of a decision could be challenged, unless there were some major defect of process.
In the event that such a circumstance occurred, it would not be the case that, simply by virtue of an application or permission—as it is now called—before the administrative court being granted for judicial review, that the intelligence on which I have to some extent, but not entirely, based my decisions could be disclosed. Where such matters have arisen in the past—they do so quite frequently—the appropriate Secretary of State signs a public interest immunity certificate.
By that process, all the information that the applicant Secretary of State seeks to withhold from open court is put before the judge. The judge then decides whether to accept the PII. If the judge decides, as occasionally happens, to reject the PII application and to order that the information be disclosed, the Secretary of State must decide whether to proceed with the substance of the application. That is how the process works.

Mr. Simon Thomas: rose—

Mr. Simon Hughes: Will the right hon. Gentleman give way?

Mr. Straw: I shall finish this point before giving way to the hon. Gentleman.
I hope that my hon. Friend the Member for Islington, North (Mr. Corbyn) will appreciate, as I am sure he does, that, by definition, intelligence information cannot be disclosed publicly, because doing so would render its collection impossible and put the sources of that intelligence at very serious risk. However, I understand the implication of what he says. One of the inherent problems in such a process, which we have tried to square with the SIAC and POAC processes, is that if the intelligence cannot he challenged, its veracity is more difficult to ascertain. That is why, although the information will be withheld from the applicant organisation, it will be challenged rigorously before the SIAC by the special advocate.

Mr. Hughes: The Home Secretary has confirmed, first, that even if he forms a view that an organisation is a terrorist organisation, he has discretion about whether to proscribe it. Secondly, he could have, but has not, sought the formal view of the Security and Intelligence Committee or that of any independent judicial authority, so he comes here with the proposals with no authority, other than that of his office and his Ministers. Lastly, on the question of how many of the 21 organisations, have there been formal representations from foreign Governments? In how many cases have the organisations or their representatives been asked for information before the Secretary of State made his decision?

Mr. Straw: On the hon. Gentleman's first point, I have not consulted the Security and Intelligence Committee. It knows about the process and was informed in advance of the decisions, but it has not been involved in reaching judgments. That is not its role. It would be quite


inappropriate if it were to be embroiled in Executive decisions. The process that has been established by this House and the other place—with my full endorsement and recommendation—is that it should be an Executive decision subject to proper scrutiny and the kind of appeal on judicial review backgrounds that I have already described. I should have added in answer to my hon. Friend the Member for Islington, North that there can be an appeal on a point of law to the appeal courts in any event against a ruling by the Proscribed Organisations Appeal Commission.
The hon. Member for Southwark, North and Bermondsey asked me if I could list all the Governments who have made representations seeking to proscribe the organisations. The answer is no. but it is in the public domain that a large number of Governments in the originating territories have made public statements seeking the proscription of the equivalent of these organisations by Governments across the world.
On the hon. Gentleman's question about whether I will disclose the degree of liaison that exists with security and intelligence services overseas, for reasons that I think he will understand, the answer to that is no.

Several hon. Members: rose—

Mr. Straw: I will give way to my hon. Friend the Member for Nottingham, South (Mr. Simpson) and then I want to close my remarks, so that other hon. Members have the opportunity to speak.

Mr. Alan Simpson: May I pursue my right hon. Friend about the point on the verification of intelligence specifically in relation to the example of the International Sikh Youth Federation that was cited? Sikhs in my constituency have made representations to me—I suspect that many other hon. Members have received similar representations—and have pointed out that Mukhtiar and Paramjit Singh, who were accused of acts of terrorism, are not members of the International Sikh Youth Federation. The organisation itself has made it clear that they are not, and have not been, members of the organisation.
The other charges that have been cited against the organisation do not make sense if the connections do not exist. Sikhs raise money in the United Kingdom, but they do so for entirely social purposes. That is consistent with other observations that there is no evidence of a threat to the west from the organisation's activities. Will my right hon. Friend tell the House how intelligence sources or representations from other Governments are checked against other sources that might provide a different picture about the credibility and integrity of that organisation?

Mr. Dennis Turner: rose—

Mr. Deputy Speaker: Order. It is not possible to intervene on an intervention. The Home Secretary must be allowed to reply to the first intervention.

Mr. Straw: I will give way to my hon. Friend the Member for Wolverhampton, South-East (Mr. Turner) if he first allows me to answer the other point.
The paragraphs in the document are based on the best information available. Is every effort made to check intelligence sources and the information derived from those sources? Yes, and to a degree that I did not anticipate before I took on this job. Very great care is taken on the assessment of intelligence. Intelligence that is wrong is worse than worthless; it can be extremely dangerous. In human organisations errors can sometimes be made, which is why we have the process that I have described beyond the decisions that I recommend to the House.
Although the criteria for appeals to the POAC are different from and narrower than the criteria for appeals to the SIAC, the process is very similar indeed. The presiding retired judges and special advocates have already shown, through the SIAC process, that they are rigorous and entirely independent of Government, and I expect the same to be true in this process.

Mr. Turner: I appreciate the opportunity to intervene. We all realise that these are weighty matters, and that my right hon. Friend finds himself in a difficult position in his very responsible job. I appreciate that the appeals mechanism will give organisations the right to make representations, but I would be failing in my duty as a constituency Member for Wolverhampton, which has a large Sikh population and an active membership of the International Sikh Youth Federation, if I did not ask my right hon. Friend to recognise that the people whom I represent—

Mr. Deputy Speaker: Order. I say to the hon. Gentleman and to those who intervened earlier that interventions are getting longer and longer. The hon. Gentleman has made his point. I remind all hon. Members that this is a debate and they will have the chance to make their contributions, if there is time.

Mr. Turner: rose—

Mr. Deputy Speaker: The hon. Gentleman ought to stop there.

Mr. Straw: Of course I understand my hon. Friend's concerns, and throughout this process I have sought to balance such concerns against the evidence before me.

Mr. Simon Thomas: At least one of the 21 organisations on the list has been on a ceasefire for 18 months. Flow will the Secretary of State review the list? Will he seek to de-proscribe organisations if ceasefires hold? How can individuals who support those organisations take part in the appeals process? If the organisations are proscribed, they may be seen as supporting terrorism, so how can they raise funds for an appeal?

Mr. Straw: The criteria for proscription are laid down in section 3 of the Act. I have also given information about the tests that I have adopted in addition to those criteria. The fact that a terrorist organisation is on a ceasefire for the time being does not, in itself, mean that it is no longer a terrorist organisation. Although the Irish Republican Army, including the Provisional IRA, has been on a ceasefire for some time, it is still on the list of proscribed organisations. If the organisation concerned


wishes to make representations to the effect that its ceasefire is so permanent and durable that it has ceased to be a terrorist organisation, that is another matter.
I turn now to the hon. Gentleman's second point, about the humanitarian and fund-raising activities of some of the organisations or bodies associated with them, which has been implicit in many interventions. I cannot stress too strongly to the House that the provisions of the Act are not aimed at any specific community or at those protesting in a peaceful, non-violent way against alleged injustices or for political change. Nor are they aimed at those raising funds for legitimate social or humanitarian purposes. I recognise that some terrorists and their supporters might seek to operate under the cover of legitimate organisations that are, perhaps, promoting political change by non-violent means and that some well-meaning people associated with those organisations have nothing whatever to do with terrorism. Those people have nothing to fear from the new legislation.

Dr. Phyllis Starkey: Will my right hon. Friend give way?

Mr. Straw: Yes, but I should be grateful if my hon. Friend's intervention were brief.

Dr. Starkey: Will my right hon. Friend clarify the status of information on each organisation in his letter to Members of Parliament? He will know that I am concerned about the section on Hezbollah attacks, which includes an attack by Lebanese nationals against armed forces illegally in occupation of Lebanon. Is he suggesting that that should count as a terrorist activity? Does that imply that we support the illegal occupation of Lebanon?

Mr. Straw: I have discussed this formally with my hon. Friend and yesterday she saw the Minister of State, Home Office, my hon. Friend the Member for Norwich, South, about it. The information on organisations is nothing more than that. It is a synopsis of what can be made public to explain why I reached the decisions that I did.
We are not seeking to proscribe Hezbollah and Hamas generally. Both organisations are political movements and, just as Sinn Fein is not proscribed, neither are they. We have tried to proscribe—according to one's point of view—their military or terrorist wings, in this case, the Lebanese Hizballah External Security Organisation and the Hamas-Izz al-Din al-Qassem Brigades.

Fiona Mactaggart: rose—

Mr. Andrew Dismore: rose—

Mr. Straw: No, I will not give way.
We have tried to be careful and to apply ourselves only to section 3.

Fiona Mactaggart: Will my hon. Friend give way?

Mr. Straw: No, I am sorry, but I must finish.
I appreciate hon. Members' concerns. I hope that the House will accept that I have tried to deal with the issue with great care, as is appropriate. In our view, the draft order is compatible with the rights set out in the European convention on human rights. It represents a fair, just and proportionate response to the threats from international terrorism. I commend the order to the House, but I shall listen carefully to representations and try to respond.

Miss Ann Widdecombe: The House only has one and a half hours for such an important debate and, as many hon. Members want to contribute, I intend to be brief. I am grateful to the Home Secretary and the Secretary of State for Foreign and Commonwealth Affairs for making their Ministers available to the Opposition during discussions on what is a difficult subject. I associate the Opposition with the Home Secretary's remarks about terrorism. We do not intend to oppose the order.
We fully support the Government's measures to deal with the destabilising menace of international terrorism. The increasing globalisation of recent years has made it much easier for international terrorist groups to move their operations from country to country. The revolution in communications technology and the internationalisation of financial markets have also made it much easier for such organisations to operate across the globe. We agree with the right hon. Gentleman that the United Kingdom should net offer sanctuary to those who use unacceptable violence to achieve their ends. We also agree that the measures are necessary and timely. We support his actions.
I am also grateful to the Home Secretary for setting out the background. Will he expand on the opportunity that the organisations that are named in the order have had to object? Have any objected and, if so, in what terms?

Mr. Hogg: Does my right hon. Friend understand the anxiety of some Conservative Members? The appeal process in section 5 of the Terrorism Act 2000 is not based on merits. As the Home Secretary rightly said, there is only a power to have a judicial review, which can ask whether he has acted reasonably. That is different from a review on the merit; of whether an organisation should be proscribed.

Miss Widdecombe: Yes, I accept that entirely, which is why I was starting to probe the Government on the opportunities that named organisations might have had to object and make representations, either directly or through others on their behalf. If so, have there been representations on the merits of the decisions taken?
The Home Secretary gave a rather cursory answer—that is not meant critically, but relates to the time available—in response to one intervention. My right hon. and learned Friend the Member for Sleaford and North Hykeham (Mr. Hogg) may wish to return to the subject in any remarks that he may make. I should be grateful if the Home Secretary would respond because it is clearly right in the interests of justice that that those who are named and proscribed should have the opportunity to make representations to the opposite effect.

Mr. Winnick: Mention has been made of the International Sikh Youth Federation, which may well


have a case. Hence my intervention on the Home Secretary in which I said that mistakes could have been made. Nevertheless, does the right hon. Lady accept, as I pointed out earlier, that some of the organisations named in the order are notorious terrorist organisations? Surely, it would be farcical to ask organisations such as the 17 November Revolutionary Organisation and other terrorist organisations for their views, especially bearing in mind the latest murder carried out by N17.

Miss Widdecombe: I was not trying to make that case at all. I was trying to probe the Secretary of State on the issue. Reasons for proscribing are properly set out in an annexe that describes the various organisations. However, bearing in mind the fact that one or two objections have been made and that there is slight concern about some organisations, I wanted to probe the Home Secretary on the opportunity for representations—even for hon. Members to make representations on behalf of groups or in response to representations that they had received.
I was not seeking to take the matter much further than that, and I would be amazed if the hon. Member for Walsall, North (Mr. Winnick) objected to people having the right to make representations.

Mr. Michael Fabricant: We would all welcome the military wing of, respectively, Hezbollah, Hammas and the Abu Nidal Organisation being proscribed, but a few hon. Members would have doubts about Mujaheddin e Khalq, which is attempting to impose—if that is the word—a democratic regime in Iran. I would welcome responses from my right hon. Friend and the Home Secretary, in his winding-up speech, on whether the MEK has had discussions with the Home Office about whether or not it should be proscribed.

Miss Widdecombe: I am sure that my hon. Friend understands that the Home Secretary must answer that question, not me. I cannot possibly know what representations the Home Office has received, although in a few weeks' time I expect to receive that information on a regular basis.
Does the Home Secretary have any plans at present to include—[Interruption.] I am sorry, I am endeavouring to ask the right hon. Gentleman a question. Does he have any plans at present to include any further terrorist organisations, either international or domestic, in the list of proscribed organisations? I should also be grateful to know what action he envisages taking against the funding arrangements of proscribed organisations.
In addition to the destabilising effect of the international terrorism groups mentioned in the order, recent events have highlighted the constant danger of terrorism in the United Kingdom. The Opposition feel as strongly as anyone else that tough measures are essential to deal with that danger. Will the Home Secretary therefore enlarge on his earlier answer about the Real IRA and Continuity IRA?
The list of proscribed organisations in schedule 2 to the Terrorism Act 2000 includes the Irish Republican Army, but does not make a distinction between the Provisional IRA and the so-called Real IRA. I think that the Home Secretary said that that did not matter, as both organisations were covered. However, I should like that to be spelled out.
The IRA is proscribed under the terms of the Act, as I said, but that Act incorporates pre-existing legislation which enables the Secretary of State to use emergency powers to enact special provisions, introduced after the Omagh bombing, against specified organisations. In order for special provisions to be enacted against specified terrorist organisations, the organisation has to be both proscribed by schedule 2 to the Terrorism Act 2000 and specified in the Northern Ireland (Sentences) Act 1998.
Organisations such as the Real IRA or the Continuity IRA are listed under the terms of the Northern Ireland (Sentences) Act, but they are not specifically proscribed under schedule 2 to the Terrorism Act. In the debate on the Terrorism Bill in the other place on 6 June last year, the Minister of State, Cabinet Office assured the other place that the Real IRA and the Continuity IRA would be covered by the generic prohibition of the IRA in schedule 2 to the 2000 Act. I should be grateful not only if that assurance could be repeated—we have heard that tonight—but if some explanation could be given as to why there is no specific prohibition. There seems to be room for confusion in that arrangement.
The Real IRA and Continuity IRA, along with the Red Hand Defenders and the Orange Volunteers, are specified under the terms of the Northern Ireland (Sentences) Act as organisations that are not observing a complete and unequivocal ceasefire, but those organisations are not specifically proscribed again under schedule 2 to the Terrorism Act.
Given all that complication, would it not be more appropriate if there were one list of proscribed organisations? Should not all terrorist organisations be fully subject to all available anti-terrorist legislation? Is there not a lack of clarity in the present arrangements? Should not the force of law be applied to all proscribed organisations, whether they are currently on ceasefire or not?
Having said that I think that there may be a case—I put it no more highly than that, pending the Secretary of State's reply—for one list, may I probe him on some rather odd omissions? There are hon. Members who have been threatened by the Animal Liberation Front. That group has been connected with activities that most of us would consider extreme and unlawful. I am sure that all hon. Members would condemn such actions in the strongest terms, yet the ALF is not proscribed. Nor is Combat 18 proscribed. That organisation also uses and espouses violence.
I have discussed the matter with the Secretary of State, but 1 should be grateful if he would put on the record his reasons for not proscribing those two organisations. Aside from those remarks, I repeat the Opposition's willingness to give all possible support to the measure. I shall be interested to hear the contributions of other hon. Members.

Mr. Robin Corbett: I should make it clear that I chair the British Committee on Iran Freedom, and share the dismay and disbelief of most of the UK's Iranian community at the mujaheddin being labelled a terrorist organisation. A range of Iranian organisations in this country have been in touch with me, but I shall not weary the House by listing them.
The reason there are so many Iranians living in the UK and why the number of asylum applications from Iranian citizens has almost trebled in the past year or so is because


those are people who cannot live at home. They are in this country and elsewhere in Europe not as terrorists and not because they support terrorism. They are, in every sense of the word, the victims of terrorism. They are among the relatives of an estimated 30,000—yes, 30,000—political prisoners butchered by the regime in Iran in the single year of 1988, and of the estimated 700 people executed under the rule of the so-called reformist President Khatami, and of the 35 political opponents that the regime has murdered abroad. The Government acknowledge that the mujaheddin
has not attacked UK or western interests.
They argue that the mujaheddin has no acknowledged presence in the UK, although it is supported here by the National Council of Resistance—the same body that was invited for many years to the annual Labour party conference.

Mr. Steve McCabe: With regard to the number of Iranians living in this country because of the circumstances in Iran, does my hon. Friend agree that it astonishing that the Mujaheddin e Khalq should be placed on the list of proscribed organisations at a time when the Home Office accepts that membership of that organisation or association with it are proper grounds for asylum in Britain?

Mr. Corbett: My hon. Friend is right; that may not be the best recent example of joined-up government.
During the passage of the Bill that became the Terrorism Act 2000, my right hon. Friend the Home Secretary said that the legislation was aimed at groups in Britain that supported efforts to overthrow democratic regimes abroad, but he made clear that dissent was a vital part of our democracy. Does he consider the present regime in Tehran to be democratic? Not even the mullahs would describe themselves in that way, and nor should they, as they have stolen democracy from the Iranian people. If he needs some help on that, he should know that as lately as yesterday, the UN special representative on human rights in Iran, Professor Maurice Copthorne, reported:
Breaches of human rights are in large part as common today as they were five years ago.
He also stated:
The number of executions reported in the Iranian press from I January to 1 December 2000 are placed at about 2000.

Jackie Ballard: When was the hon. Gentleman last in Iran, and when did he last speak to ordinary Iranian people, as I have done recently? If he speaks to them, he will find that most of them support progress and reform. He will also find little or no support for the mujaheddin or armed revolution.

Mr. Corbett: The hon. Lady's comments are interesting. I happened to be chosen to be part of an Inter-Parliamentary Union delegation to Iran. I think that it was three years ago. The then Iranian Parliament found the visit inconvenient, as myself and one of my hon. Friends were known critics of the mullahs' regime, which did not feel able to allow us to make the visit under the auspices of the IPU. The delegation never left the country

and I do not know whether the invitation has been renewed. Whatever impressions she gained on her visit to Iran, they cannot wipe out the brutal atrocities and murders that the mullahs' regime carries out against its own people and its political opponents around the world. Those are matters of fact; if she wants to borrow "Crime Against Humanity", a book which details the murders committed in the single year of 1988 and lists the victims' names, I shall gladly lend it to her.
Professor Copthorne went on to say:
The jailing of journalists and political dissidents and the general denial of fair trial continues unabated.
What puzzles me about that is that the Home Secretary told the British Committee on Iran Freedom in his letter that the mujaheddin is an "Iranian dissident organisation". He went on to say that
it claims to be seeking the establishment of a democratic, socialist Islamic Republic".
He might more accurately have said that it leads a broad coalition that wants to establish a pluralist and secular regime that guarantees human rights and freedoms. What is it doing, therefore, on the list of proscribed organisations? It is the regime and not the resistance to it that belongs on the list.
I must tell my Front-Bench colleagues that it is suspected that when the regime's Minister of Foreign Affairs, Kamal Kharazi, came here last year, he demanded the banning of the mujaheddin as the price of better relations between our two countries. It is further suspected that that call was repeated when my right hon. Friend the Minister of State, Cabinet Office was in Tehran last month. The Home Secretary should know that last year, 335 Members of the House—a majority, as it is one more than a half—and 61 peers signed a statement on human rights and democracy in Iran. It called on our Government to support the Iranian people's struggle for freedom and democracy. That action was mirrored by a majority of members of the US Congress, 150 French Deputies, and Members of the Parliaments of Italy, Belgium and Luxembourg.
This year, in a statement headed "Iran—the cry is freedom", hon. Members are again signing up to say that the United Kingdom should support the millions, not the mullahs, in the rising demands for democracy and human rights. While she was in Iran, the hon. Member for Taunton (Jackie Ballard) might not have noticed the evidence from pro-democracy demonstrations across that country that the mullahs' regime is on its last legs. The so-called reformers and reactionaries are two faces of a single, repressive regime.

Mr. Hogg: The hon. Gentleman makes a serious case, but would he accept that one of the vices involved in the process on which we are embarking is that no independent body exists to asses s the points that he is making in relation to the mujaheddin? Will he also accept that the review mechanism provided by section 5 of the 2000 Act is concerned not with the merits of the argument but with process and procedure, and with whether the Secretary of State has acted reasonably?

Mr. Corbett: I understand exactly what the right hon. and learned Gentleman is saying. However, in this case, the question is much easier. Either our Government regard


the regime in Iran as democratic or undemocratic. That is very simple, and I hope that the Secretary of State will give a clear answer when he replies to the debate.
The evidence that I have presented to the House shows that Iran has one of the most vile and corrupt regimes anywhere in the world. It is a regime that is afraid of its own people and one which will not tolerate dissent or enable any aspect of democracy. It closes newspapers, jails journalists, and brings out the army if there is any kind of demonstration for jobs and freedom. Those are not the hallmarks of a democratic country, and that is why I object to the mujaheddin being on the list.
I say in all seriousness to my right hon. Friend that, in this respect, this order repeats the mistakes of 1978, when this country backed another dying regime in Iran. If this order is passed, we shall add insult to injury, and betray the hopes of the Iranian people again.

Mr. Simon Hughes: Let me start with a word or two of agreement with the Government. The Liberal Democrats argued, before the Terrorism Act 2000 was introduced, that we should have a UK-wide anti-terrorism Act, not an Act that treated part of the United Kingdom differently, as previously, when exclusion orders could be issued in relation to Northern Ireland. We also believed that the ability to review the legislation should exist, to reconsider the way in which terrorism was defined. We also argued that Parliament should be able to review the legislation regularly.
The Home Secretary knows from debates on the Act—the Minister of State, Home Office, the hon. Member for Norwich, South (Mr. Clarke), other hon. Members and I served on the Committee that considered it—that the definition of terrorism was highly controversial, and that my hon. Friends and I proposed much more narrowly drawn alternatives. We also proposed that the Act should lapse after five years if it was not renewed. We lost those arguments and the Government got their way.
Liberal Democrats have always accepted the need for the power to proscribe terrorist organisations. When the House debated the Bill, it specifically discussed the Irish organisations on the list, which had been the subject of detailed scrutiny in Conunittee. We foresaw from the beginning the problems that we are discussing tonight.
We foresaw problems in allowing the Secretary of State to make a subjective judgment—this is not a slight on his integrity—on the basis of information not available to other Members of the House, that enables him to issue orders that, if approved, proscribe organisations from that moment.
Organisations avoid proscription only if they can clear one of two hurdles. They must either persuade the Secretary of State to reverse his view or win a case before the appeal commission. As the right hon. and learned Member for Sleaford and North Hykenam (Mr. Hogg) and others have argued, that, too, is not an appeal in which both sides would appear with an equality of arms and a party could know the case against it and be able to rebut it.
It is also clear that the Home Secretary could have asked the Intelligence and Security Committee to give him a view, but he chose not to—that is why I put the specific question to him—although he asked it to

comment on the Mitrokhin affair. The committee represents Parliament. It meets to deal with sensitive matters and to give an opinion that provides a broader base for Government decisions and for judgments to be made on them in the House. It was not asked to comment, however; nor was an independent judicial view taken, although we argued for that in Committee.
Perhaps the most telling concern of all is that, although we have had only an hour and two minutes of debate and have only 28 minutes left, the House is meant not only to judge on 21 entirely different organisations, but to hold one vote and make one decision that will proscribe every one of them, regardless of whether, according to the Home Secretary's list, they have a headquarters here, have members here or have been active here.

Mr. Hogg: I mean no slight on the Home Secretary, but does the hon. Gentleman accept that the real problem is that we do not have a clue about the strength of evidence on which the right hon. Gentleman relies? We have to accept his word. Does the hon. Gentleman agree that that is too fragile a basis on which to proscribe an organisation?

Mr. Hughes: My colleagues on the Liberal Democrat Benches and I share that view. My right hon. and learned Friend the Member for North-East Fife (Mr. Campbell) referred to N17, which of course is a terrorist organisation. It has committed terrorist acts abroad, but never here. The mujaheddin has a good case for saying that it is taking on an undemocratic regime. It may be a terrorist organisation, but that does not necessarily require the Home Secretary to proscribe it. The Liberation Tigers of Tamil Eelam is involved in a peace process with an intermediary—the Norwegian Government—and is seeking to resolve an intractable and awful civil war in Sri Lanka. The International Sikh Youth Federation also seeks to play its part.
All those organisations have a case, just as 20 or 30 years ago the African National Congress would have had a case, or 10 or 20 years ago those opposing General Pinochet would have had a case. Many such organisations, by any definition, would be classed as terrorist for undertaking activity that may have been illegal in their own countries, but which would always have been legal in democratic countries. That is the difficulty of tonight's debate.
There has been no judicial confirmation of the proposed organisation and no cross-party agreement. There would be no appeal based on the merits of a case. We must be careful that we do not put outside the law certain activities and certain people when their opportunity to put their case under the criminal law is not the same as that for others in different contexts.

The Minister of State, Home Office (Mr. Charles Clarke): Will the hon. Gentleman elaborate on his case involving the example of N17 in Greece, which has a democratic Government? Why should it not be on the list?

Mr. Hughes: I do not argue that none of the organisations listed is clearly terrorist under the definition in the Act. I am not arguing on the basis of facts—not only in the list given by Ministers, but known to the House—that certain organisations have not owned up to


committing terrorist activities. N17 is in that category. What appears to have happened, however, is that a list has been presented to the House on a take-it-or-leave-it basis, largely as a result of representations from foreign Governments about concerns abroad rather than as a result of concern about whether terrorist acts would be committed in this country—acts that this domestic legislation is intended to regulate.

Mr. Winnick: Will the hon. Gentleman give way?

Mr. Hughes: No. The hon. Gentleman has already intervened several times.
My colleagues and I are unhappy about the motion above all because we cannot possibly give fair treatment to each and every organisation when we cannot vote on separate proposals that they be regarded and proscribed as terrorist organisations. Let me give an example. My constituency contains the headquarters of a Tamil organisation, Eelam house. I have been there to see members of the organisation, who have links with, and associate with, those who have—in their words—taken on a freedom struggle for the Tamil homeland. Many people in the world have been through that process prior to self-determination, but the order could make any Member of Parliament who talked to any such organisation guilty under the 2000 Act from the day of the order's implementation, before we had been able to argue the case.
It may be wrong for those organisations to be proscribed as terrorist organisations, or it may be not wrong but unhelpful. I merely say that we should be very careful about endorsing a proposal on a take-it-or-leave it basis. It would be better for the Home Secretary to withdraw the order, and allow the House to consider each organisation on its merits. That could have been done, it should have been done, and it is a great pity that it has not been done.
We are not giving proper consideration to what is a properly weighty proposal, intended to ensure that we deal with terrorism firmly and fairly. We are certainly not dealing with it fairly tonight.

Mr. Jeremy Corbyn: I shall be brief, because we have to be brief. This is a travesty of the way in which such an important and serious issue should be discussed. Debate is being limited to an hour and half, late at night, with a catch-all of 21 different organisations that the order proposes to ban. We have been given no opportunity to discuss those organisations in any detail, or to engage in any other form of parliamentary scrutiny of the legislation.
The history of anti-terrorist legislation is not good. The original Prevention of Terrorism (Temporary Provisions) Act 1974 was rushed through the House, and resulted in serious miscarriages of justice. The first person to be arrested in this country under the Act was Paul Hill, a constituent of mine, who was subsequently imprisoned as one of the Guildford Four. He was finally released 17 years later, with an apology of a sort from the High Court and the Home Secretary of the day. I think that we should think very carefully about the effect of the overall ban that the Home Secretary is proposing.
The hon. Member for Southwark, North and Bermondsey (Mr. Hughes) is absolutely right: if this legislation had been in place 10 or 15 years ago the ANC would certainly have been on the list, as would Umkhonto we Sizwe—which was undertaking some forms of military activity in South Africa—and many other organisations from different parts of the world.

Ms Diane Abbott: While no one denies the atrocities perpetrated by some groups on the list, what we are attempting to scrutinise tonight is the process, the thinking and the procedure behind this type of proscription. The history of Britain's withdrawal from empire is littered with groups that were described as terrorists, but survived to take tea with the Queen.

Mr. Corbyn: Indeed. I am sure that had such legislation been in operation in 1945, when the pan-African unity conference was held at Chorlton cum Hardy town hall, every one of the people there would have been arrested for being a terrorist, because they were seeking freedom from the British empire. Later, however, every one of those people became either a Prime Minister, President or Cabinet Minister of one African country or another. Later, without exception, every one of them took tea with the Queen.
The Home Secretary should also tell us—if he has a few minutes at the end of the debate perhaps he will do so—where the list came from. I am very well aware that the Indian Government, the Turkish Government, the Sri Lankan Government, the Iranian Government and undoubtedly many other Governments have been constantly pressing the British Government to close down political activity in this country by their opponents. I also believe that all those organisations—surely it is purely coincidence—are also on the State Department list in Washington. I am sure that that is just a coincidence of history and that there is no complicity whatsoever.
I also ask the Home Secretary to think through the implications of what hon. Members are saying. None of us likes bombing. None of us supports terrorism. None of us wants violence. The end game to violence and to achieving peace is a political process, giving people and their organisations the political space to argue and debate.
The hon. Member for Southwark, North and Bermondsey mentioned the situation in Sri Lanka. The Liberation Tigers of Tamil Eelam are on the list of organisations to be banned. It is currently observing a ceasefire, although it has been violated by the forces of the Sri Lankan state What message are we sending to the Tamil people living in this country, perhaps because they have gained asylum here? We are saying that an organisation that many of them support is to be banned. A similar point can be made in relation to the peace process in Turkey—which we hope will end successfully—where the Kurdistan Workers party is also observing a ceasefire.
Surely it would be far more useful to work with international organisations that are attempting to achieve ceasefires and peace than to ban them from operating in this country.

Mr. Winnick: I think that my hon. Friend has conceded that some of the organisations listed are


engaged in terror. In what type of continuing peace process is N17, for example, engaged? Greece is an entirely democratic country—the junta has, fortunately, been overthrown—and has been so for the past quarter of a century. N17, however, wants to destroy that democratic structure. As my hon. Friend knows in June 2000 it murdered Brigadier Stephen Saunders.

Mr. Corbyn: My hon. Friend has jumped slightly ahead of my comments, but I shall help him with that. If an organisation is engaged in criminal activity, the criminal law is available to deal with it.
I believe that the proposed process is wrong because it would entail the Home Secretary making a decision on the basis of intelligence information. Subsequently, he would receive representations from hon. Members, from representatives of the organisation concerned and from anyone else who cared to make a representation that he cared to receive. Hon. Members and the organisations would not know what had been said to him. Subsequently, he may impose a ban, which may then be the subject of an appeal to the independent appeal committee that he has appointed. The chairman of that tribunal will also receive the security information, whereas the other parties will not. If the matter becomes the subject of a judicial review, a public interest immunity certificate may be granted by the Home Secretary.
Whoever is Home Secretary, under the order he or she is judge, jury and proponent of the initial decision. I believe that the process should be far more open and that if something is wrong, the criminal law is available to deal with it.
Despite the Home Secretary's earlier comments, I believe that there are serious problems with the legislation's compliance with the European convention on human rights and with our own Human Rights Act 1998. There are serious problems also with the possible criminalisation of people during the appeals process. If the House passes the order and all the organisations are banned, the order would, as I understand it, take effect immediately. Consequently, anyone involved in those organisations will automatically become a criminal. However, the organisation may appeal against the ban and it may be lifted. Nevertheless, there is the possibility of a miscarriage of justice if people are convicted of criminal activity by belonging to an organisation, despite the fact that the organisation can appeal and, subsequently, the ban might be lifted.

Fiona Mactaggart: I believe that my hon. Friend has met a constituent of mine who is an active member of the International Sikh Youth Federation, and who has certainly persuaded me that his activities have nothing to do with terrorism. Does my hon. Friend share my concern that the order covers some organisations whose members are social and political activists, and that it could criminalise them in a way that would be inappropriate, given the work in which they are involved?

Mr. Corbyn: My hon. Friend is right. I met a delegation of people from the Sikh community this afternoon, as did many other hon. Members. One could not meet more active, upright or socially aware people. Are we to make them criminals for their membership of those organisations? That will be the effect of the order. The message being given to members of Muslim, Sikh,

Tamil, Turkish and Kurdish communities around the country is that we are interested in banning their organisations because they are calling for fundamental political changes in their home countries.
We are in danger of making a very bad decision that will set a bad example of the true work of a democratic Parliament. We will be in danger of criminalising—or of driving into the hands of criminals—a lot of people who have no wish to take part in criminal activities. That danger will arise because we are not prepared to take part in what ought to be the political process to bring peace to places around the world where at present there are only difficult and almost intractable problems.
How many more organisations will be put on the list because Governments around the world find it inconvenient that international organisations use London as a base from which to spread political propaganda aimed at securing change in their home countries? Britain has given refuge to many people from different parts of the world for a long time. Enormous political changes have resulted, such as those resulting from the struggle to bring about independence from empire, to which my hon. Friend the Member for Hackney, North and Stoke Newington (Ms Abbott) referred.
The House should not pass this order tonight. I very much hope that the Home Secretary will reconsider seriously the great mistake that I believe he is making.

Mr. William Thompson: I, too, have a number of reservations about adding 21 new organisations to the proscribed list. It is true that many of those organisations are involved in violence in other parts of the world, but the judgment that we have to make is whether they have been involved in violence in the United Kingdom. An order proscribing every organisation involved in violence around the world would be very wide and difficult to police.
We in Northern Ireland have had plenty of terrorists from various organisations. On numerous occasions we have asked that they be proscribed. We have always been told that that was a difficult matter, that a careful balance must be struck, and that proscribing the organisations might give them more publicity than they would otherwise achieve. As far as we can see, the order strikes no balance and makes no judgment as to what activity a proscribed organisation might be carrying out in Northern Ireland. The fact that such an organisation is carrying out terrorism in other parts of the world is considered to be sufficient for it to be proscribed here. That is an undesirable feature.
I wish to emphasise a difficulty raised by other hon. Members—the use of the term "Irish Republican Army". I know that it has been said that the term is used in a generic way, to cover both the Provisional IRA and the Real IRA. That may be difficult to argue in legal terms. The order should be made explicit in its references to the Real IRA: in that way, there will be no doubt or controversy in any future legal discussion.
The Real IRA is a terrorist organisation which killed 29 people in my constituency. Its members are carrying out terrorist activities on the mainland. It is a very dangerous organisation. It is therefore right that it should be explicitly named so that there can be no doubt.
We must, however, ask ourselves what the point of proscription is. The IRA is a proscribed organisation, yet the Government are prepared to negotiate with its members. Various other terrorist organisations are proscribed—what difference has it made? The Government have still negotiated with them and made concessions to them—indeed, whether those organisations were proscribed or not does not seem to have made much difference. What is the point of proscription and what benefits will accrue from it?
In conclusion, we have reservations about the order and although we do not wish to support terrorism in the United Kingdom in any way, we believe that this is the wrong way to go about it at this time.

Mr. John Bercow: This has been a good, albeit all too short and perhaps truncated, debate. Let me make it clear at the outset, echoing what my right hon. Friend the Member for Maidstone and The Weald (Miss Widdecombe) said at the beginning of the debate, that we endorse the Government's central intention and do not intend to frustrate it tonight. Accordingly, I cannot encourage my right hon. and hon. Friends to do any differently. Nevertheless, I hope that the Home Secretary has listened carefully to the views expressed.
Terrorism is the most appalling scourge; the overwhelming majority of Members are united in denunciation of it. My right hon. Friend the Member for Maidstone and The Weald rightly pointed out that the extent of globalisation, the increase in the facility of technology and the nature of international financial markets all conspire to assist the terrorist and make our task that much more difficult.
I readily acknowledge that in a procedure of this kind, intelligence reports naturally cannot be freely tossed around, or their contents exchanged, in the open political marketplace. I recognise the constraints within which the Home Secretary is operating. Nevertheless, at the risk of inflicting grave injury upon myself, I listened carefully to the speech of the hon. Member for Southwark, North and Bermondsey (Mr. Hughes), to the cogent and considered speech of the hon. Member for Birmingham, Erdington (Mr. Corbett) and to the speech of the hon. Member for Islington, North (Mr. Corbyn), who has been consistent on this subject. Their speeches raised legitimate concerns, which I suspect have permeated the Chamber.
Particular grievances have been raised about individual organisations such as the International Sikh Youth Federation, the Liberation Tigers of Tamil Eelam and the mujaheddin. Those concerns must be addressed. It is obviously a weakness of the arrangement that the Government have adopted that there is no opportunity to cherry pick and consider the merits of each organisation. We are invited en bloc to give our approval or en bloc to withhold it.
Tonight we will give the Government the benefit of the doubt in the name of presenting a united front in opposition to terrorism. My right hon. and learned Friend the Member for Sleaford and North Hykeham (Mr. Hogg) makes it clear that he does not intend to follow suit, and his intentions are respected. However, I am setting out the position of the Opposition Front Bench.
I hope that the Home Secretary will respond seriously to the points that have been made. My right hon. and learned Friend the Member for Sleaford and North Hykeham made the point that the test in an appeal seems purely to be the legal test of reasonableness rather than one requiring the merits of the case to be considered. Need that be the case? Is it unavoidable? Could the Home Secretary reconsider that test for the future?
My second observation is again intended to amplify the concern that my right hon. Friend the shadow Home Secretary expressed at the outset—why have the exclusions? There is no reference to the Animal Liberation Front, despite the fact that two years ago about 800 recorded incidents of serious violence were perpetrated in this country by animal rights terrorists. Those are all on the record. There is a grievance. Elsewhere in Government policy, it is a public grievance that they are rightly addressing, which does not seem to be consistent with what is being said in this measure, so I hope that the Home Secretary will look into that.
Finally, my right hon. Friend made a valid point about Combat 18—a truly despicable organisation, which has deployed enormous violence in pursuit of its sinister goals on many occasions. The Government's intention is sound. The Secretary of State's motivation is, as far as all decent people are concerned, not remotely in dispute, but this is a democratic Chamber, democratic concerns have been expressed by democrats and I invite him to respond to those concerns.

Mr. Straw: I am grateful to the hon. Member for Buckingham (Mr. Bercow) for the way in which he spoke from the Conservative Front Bench and to my hon. Friends and Opposition Members for the manner in which they made what are in some cases very strong opinions felt about organisations that have been included in the order.
To all right hon. and hon. Members who spoke about individual organisations I would say that we will take full account of what has been said here and, obviously, of further representations made if, as I suspect, a number of those organisations that have been mentioned apply, initially to me, for de-proscription.
My hon. Friend the Member for Birmingham, Erdington (Mr. Corbett) made a powerful speech about Iran—a subject on which he speaks with considerable knowledge. He asked some questions about how I judge the current political position in Iran. For me, the criteria in determining whether an organisation should be included—I think that he will understand this—in the list are those laid down in section 3 of the Terrorism Act 2000. I have had to apply myself to the law, which has only recently been the subject of considerable discussion and agreement by the House.
I was asked about other organisations, including some involved in domestic extremism. The list is the list for the time being. It is open to addition or subtraction at any future stage.

Mr. Barry Gardiner: rose—

Mr. Straw: I am sorry, but I do not have time to give way.
We keep those matters under review. I made the decisions in the light of the best evidence, my judgments and the advice available to me.
There are two final matters. One is the scope of the appeal before the Proscribed Organisations Appeal Commission, which will be on judicial review grounds as that is laid down in section 5 of the 2000 Act. Since the coming into force of the Human Rights Act 1998, however, the grounds are wider and POAC will have to address whether refusal to de-proscribe amounts to interference with convention rights, which will in turn lead to questions about the proportionality of my decisions.
Finally, on the process, I appreciate; that this has been a short debate but a good one. As fat as I can recall, no amendments were tabled during the proceedings of the Terrorism Bill to call for a different process other than the affirmative procedure with one order. We will take full account of all representations nude and I commend the order to the House.
Question put:—

Mr. Speaker: I think the Ayes have it.

Hon. Members: No.

Division deferred till Wednesday 14 March, pursuant to Order [7 November 2000].

Orders of the Day — Science and Technology Committee

Mr. John McWilliam: I beg to move,
That Mrs. Claire Curtis-Thomas be discharged from the Science and Technology Committee and Mr. Tony McWalter be added to the Committee.
I shall not detain the House, except to say that the change between the hon. Member for Crosby (Mrs. Curtis-Thomas) and the hon. Member for Hemel Hempstead (Mr. McWalter) has been agreed by both hon. Members and by all members of the Committee of Selection. I commend the motion to the House.

Mr. Michael Fabricant: This matter should not pass without tribute being paid to the hon. Member for Corby. I have the honour of serving on the senate of the Engineering Council with the hon. Member for Corby—[HON. MEMBERS: "Crosby"]—with the hon. Member for Crosby (Mrs. Curtis?Thomas). I am grateful for that correction. The reason that I made a mistake about the hon. Lady's constituency is that I know her as "Our Claire". She serves with me on the senate of the Engineering Council and plays an active role in promoting engineering, both in the Chamber and in Westminster Hall.
I have not had a chance to speak to the hon. Lady this evening, to determine why she is leaving the Committee, although I am delighted that the hon. Member for Hemel Hempstead (Mr. McWalter) will join it. He, too, has an engineering background. He took a BSc in pure mathematics as well as one in philosophy—an interesting combination.
I have some concerns that no explanation of the change has been given, other than the fact that both hon. Members have agreed to it.

Mr. John Bercow: I certainly do not want to cavil about the thrust of my hon. Friend's argument, but can he explain why he chose to describe a study of mathematics and philosophy as interesting for the purposes of the debate?

Mr. Fabricant: A friend of mine—with whom my hon. Friend is familiar—is a director of the John Lewis Partnership—

Madam Deputy Speaker (Mrs. Sylvia Heal): Order. I remind the hon. Gentleman that the motion is extremely narrow.

Mr. Fabricant: I shall not pursue philosophy, politics and economics, but will simply point out that the hon. Member for Hemel Hempstead, who is to join the Committee—the purpose of the motion—holds undergraduate and postgraduate degrees in mathematics, which—

Mr. Bercow: Like Descartes.

Mr. Fabricant: Indeed. The holding of such degrees may or may not make an individual suitable for the Committee.
Why have the two hon. Members agreed to make that swap? The hon. Member for Blaydon (Mr. McWilliam), who proposed the motion, said that the two hon. Members had agreed to the swap. However, before my hon. Friend the Member for Buckingham (Mr. Bercow) intervened, I was about to ask why the swap is being made at such a late stage of the Parliament.

Mr. McWilliam: We do not seek to ask why Members want to change; if they want to do so, that is fine. The matter has been agreed by all parties. If the hon. Gentleman has a problem with that, he must have a problem with his Whips—he should ask them about it.

Mr. Fabricant: The hon. Gentleman sounds Alfred, Lord Tennyson—
Their's not to reason why,
Their's but to do"—
but not, in this case, die—I hope.
My point is important and sound. At this late stage of a Parliament, why have two people decided to change membership on the Committee?

Madam Deputy Speaker: Order. The hon. Gentleman repeats the argument that he made earlier. I remind him once again of the narrowness of the motion and of the debate.

Mr. Fabricant: I thank you, Madam Deputy Speaker, for your guidance. I simply want to make the point that the hon. Member for Crosby has served well on the Committee—especially by promoting engineering both in the Chamber and in Westminster Hall. She has raised questions about the status of chartered engineers and members of the Engineering Council. It is most unfortunate that she is not in the House tonight to say why she is standing down. She has provided an excellent service.

Mr. Bercow: I echo what my hon. Friend says about the hon. Member for Crosby (Mrs. Curtis-Thomas), but does not he agree that perhaps an even more salient question is why the hon. Member for Hemel Hempstead (Mr. McWalter), who is indeed a distinguished academic, is not present to participate in, or at least observe, the proceedings of the debate about the proposal that he be added to the Committee? Why is he not here?

Mr. Fabricant: rose—

Madam Deputy Speaker: Order. The House is perfectly entitled to debate the change of membership of a Committee whether or not the Members concerned are present.

Mr. Fabricant: Of course you are absolutely right. Madam Deputy Speaker, but I think that my hon. Friend the Member for Buckingham is saying that perhaps there is a little arrogance in the motion, in that the two people concerned are not here tonight. But I do perfectly understand—

Madam Deputy Speaker: Order. Perhaps I could put it to the hon. Gentleman that that really is irrelevant to the motion that we are discussing.

Mr. Fabricant: I think the point is that the motion concerns the behaviour of two individual Members or, if one likes, the service that they will perform on this Committee, which is a Committee of the House, and it would have been interesting, had they been present, to determine what motivation there was for one to leave and for the other to replace them, particularly at this late stage in the Parliament. [Interruption.] It is also a late stage in the evening, and I can see that Ministers on the Treasury Bench are particularly concerned that—

Mr. Keith Bradley (Treasurer of Her Majesty's Household): indicated dissent.

Mr. Fabricant: They are not concerned that this motion is passed quickly. There is some confusion because of these sedentary interventions from those on the Treasury Bench. Some are saying that they want this motion passed, some are not, and I am a little confused on that point.
The hon. Member for Crosby has provided good service. I hope that she will continue to provide service on the Engineering Council. Just as a very brief aside

Madam Deputy Speaker: Order. Once again, I must remind the hon. Member just how narrow is this particular debate. Will he please confine his remarks to it?

Mr. Fabricant: The motion reads:
That Mrs Claire Curtis-Thomas be discharged from the Science and Technology Committee and Mr Tony McWalter be added to the Committee",
but as the House authorities are allowing an hour for debate, presumably with the agreement of the Speaker, presumably there is some scope to discuss the merits of the two individuals concerned; otherwise, I cannot see how an hour, or even a minute, can be allowed for any particular area of debate.

Mr. Keith Bradley: indicated assent.

Mr. Fabricant: I see that the Deputy Chief Whip fervently agrees with me on this issue.
In conclusion, unless anyone cares to intervene on me on this point, I will not disagree with the motion, as the hon. Member for Blaydon has said that both individuals have agreed to the change. However, it would have been nice if either of them had been present. It would have been interesting to know why this is happening at such a late stage in the Parliament, unless we are going to find out that it is not a late stage in the Parliament, and that the Prime Minister is announcing that there will be a general election in May—M my 2002.

Question put and greed to.

Resolved,
That Mrs. Claire Curtis-Thomas be discharged from the Science and Technology Committee and Mr. Tony McWalter be added to the Committee.

Orders of the Day — Business of the House

The Parliamentary Secretary, Privy Council Office (Mr. Paddy Tipping): I beg to move,
That—
(1) at the sitting on 22nd March the Speaker shall put the Questions necessary to dispose of proceedings on any Motion in the name of Margaret Beckett relating to Election of a Speaker not later than Four o'clock, and such Questions shall include the Questions on any amendment selected by the Speaker which may then be moved; and
(2) if proceedings on any such Motion have not been completed before Four o'clock, the Private Business set down by direction of the Chairman of Ways and Means for consideration at that hour may be proceeded with, though opposed, for throe hours after it has been entered upon.
The motion simply ensures that next Thursday—22 March—the House can reach a decision on a procedure for electing a Speaker. The Government intend very shortly to put down Standing Orders that would implement the Procedure Committee's recommendations.
I am grateful to the Committee for its report and recommendations. A good deal of thought and work has gone into the report. Next week, colleagues will have a discussion on that report; tonight's motion just sets out the framework for that discussion.
Members will note that the business motion will also allow the questions to be put on any amendment selected by the Speaker. The motion will give the House an opportunity to deal with any such Amendments. It may assist the House this evening if I say that an amendment will be tabled to give Members a choice between an open and a secret ballot for Speaker, as recommended by the Procedure Committee.
It may also interest Members to learn that, back in 1972, when the House agreed the current Standing Orders on the election of a Speaker, the debate lasted for an hour and five minutes. Even though, as we age, we are doubtless more garrulous, I do not think that the time suggested tonight for the debate is unreasonable. I am pleased that the House is to have an early opportunity to discuss the Procedure Committee's report.

Mr. Dominic Grieve: Although I welcome the opportunity that the House will be given to discuss the election of a Speaker, I have to tell the Minister that I have serious reservations about the amount of time allocated to the debate, and I hope that I may now have the opportunity to develop them a little.
The Minister said that one hour and five minutes was spent discussing the matter in 1972, but one need only look at the Procedure Committee's report to understand what a revolution in our affairs has occurred since then. The Procedure Committee makes it clear that the changes made in 1972 were simply intended to bring some order to a system that had previously been governed by no regulatory mechanism whatever. Indeed, the Clerk, rather than the Father of the House, took the Chair before that date, and there was a free for all, without Standing Orders of any kind. I am sure that the Minister will find it easy to agree that what actually happened in 1972 was that a decision was taken simply to determine, by Standing Order, what should happen in future
As we know, at the most recent election of the Speaker, it became fairly apparent that the system that had been set up in 1972, which had previously led to only one contested election before last year's, took a very great deal of time to go through. Not only did it take a long time to go through, but a large number of hon. Members expressed widespread dissatisfaction with the entire system. That is why the Procedure Committee decided to report on the matter. Indeed, it produced an extremely useful and interesting report, which repays careful study.
About 130 Members replied when the Procedure Committee sought our views, but the diversity of opinion expressed in the replies to the questionnaires that were sent out is simply colossal. It covers the full spectrum of choices that individual Members might wish to have. Given that this is completely non-party political matter, I am sure that the Minister will agree that it is apparent that no consensus on how best to proceed exists in those submissions.
I do not intend to consider the report this evening; that is not the purpose of this debate or of the motion. However, one has only to consider the diversity of views to understand that there must be enough time for those diverse views to be expressed. 1 am sure that the Minister will also agree that there is always a danger that when a Government, however well-intentioned, table a motion that ultimately expresses their view, a large number of hon. Members will be dissatisfied not only with that motion but with any amendment to it that the Minister says we shall have an opportunity to discuss. Apart from anything else, we do not even know exactly what is proposed for the implementation of the Procedure Committee's suggestions.

Mr. Michael Fabricant: Does my hon. Friend agree that there is one thing that makes Members of Parliament particularly vocal, and that is matters that affect them personally? Does he not agree that the election of a Speaker affects all 659 hon. Members? It therefore follows that, particularly given the diverse nature of the responses which my hon. Friend has already described, many of those 659 Members will want to make long and detailed contributions to the debate.

Mr. Grieve: I have no difficulty agreeing with my hon. Friend's comments. I am sure that he will agree that we must be careful to ensure that the House is not seen indulging in too much navel gazing. There are affairs of the nation to consider as well as those of regulating the House. I dare say that the public would think it rather odd if we were to devote days and days to discussing how we should elect a Speaker.
However, the issue certainly goes beyond simply the interest of Members. The Speaker has a very special status within our constitution. He is there as the defender of our rights.

Mr. Jim Dowd (Lord Commissioner to the Treasury): Or she.

Mr. Grieve: He or she is there as the defender of our rights, so it is important that we get right any changes that we decide to implement. It is important that the public should have the impression that there has been reasoned


and, if necessary, leisurely discussion of the options, and it is important that the decision that we finally take commands consensus.
A point that has often been touched upon is that debate in the Chamber should not involve a short discussion and then a vote to decide who is in the majority. By the process of debate, we should at least reconcile those who may lose in the vote to the decision that the House has taken. That is what parliamentary democracy is all about.
I have outlined the basic principles, so I shall now consider the precise motion that has been placed before us. It is apparent that the matter will come before the House on Thursday 22 March. On an ordinary Thursday, we start early with Question Time. Business questions follow, and there is always the possibility of a statement. The motion proposes that we should conclude the discussion at 4 o'clock. The Minister knows that, because of business questions, it is improbable that we shall start any debate before 1.25 or 1.30 pm. I say this neutrally, but sometimes the allegation is made that the Government make statements either for their own convenience, because they want to indulge in a bit of spin, or because they wish to wreck the business of the House for that day by depriving hon. Members of the opportunity for debate. I am not seeking to suggest that they will do that on this occasion—not at the moment anyway. I merely wish to point out that we are facing a national crisis in agriculture because of foot and mouth disease, so it is perfectly on the cards that, for wholly legitimate reasons, a Minister may wish to come to the House on 22 March to make a statement. That usually leads to a further hour of the House's time being taken up, so the debate on the election of the Speaker may last for no more than an hour and a half. I have to say to the Minister that, on the basis of what I said a few moments ago about the controversial nature of the proposals, an hour and a half is wholly insufficient. I hope that he will take that point in the spirit in which it is intended.

Mr. John Bercow: My hon. Friend is setting out a persuasive critique. Does he agree that the supreme irony of the situation that he has just described is that if what he described happened, we would have less time for a debate on the substantive motion concerning how we should operate in future than is potentially available to us this morning for this preliminary procedural discussion?

Mr. Grieve: My hon. Friend is right, although I thought I heard an hon. Member say from a sedentary position that it is not yet morning in parliamentary terms. That is correct. It is still yesterday or, perhaps, today, and we can continue with its being today for a very long time if necessary—sometimes for so long that tomorrow disappears. I do not want to inflict that on the House, but my hon. Friend makes an important point.
If we are to have a debate such as that referred to in the motion, it would be sensible to set the rest of that day aside for that purpose. If there is a possibility that the debate might go short—in 1972, as the Minister pointed out, an hour and five minutes proved sufficient—I am sure that the Government can table a host of matters to be

debated thereafter, as is their custom, which will not interfere with or curtail discussion of the election of the Speaker.

Mr. Bercow: I am exceptionally grateful to my hon. Friend for his generosity in giving way. In view of the importance of the election of a Speaker and the respect that all right hon. and hon. Members feel for that high office, does my hon. Friend agree that, even if it were difficult—and it should not be—to accommodate a proper, lengthy and perhaps leisurely debate on a Monday, Tuesday, Wednesday or Thursday, no right hon. or hon. Member should object to the notion that we might debate the matter on a sitting Friday? It would, after all, be a one-off.

Mr. Grieve: My hon. Friend makes a good point. Sitting Fridays are not, on the whole, supposed to interfere with the Government's carriage of their business, so if we were to debate the matter on such a Friday, it could not be suggested that we were putting our priority of navel gazing above the interests of the country at large.
I turn now to another aspect of the problem. I have touched on this, but it bears consideration. At the moment, we do not have the motion that the Government intend to table. We have got the order wrong. We can usually pick up in the Tea Room, the Corridors or elsewhere whether a motion tabled by the Government will command consensus and rapidly identify the issues that are likely to excite hon. Members and make them want to participate in the debate.
Without wishing to stray into the substance of the Procedure Committee's report, and just by way of illustration, I point out that the report contains several proposals. Those on which most hon. Members will focus relate to the system of voting, ballots and their secrecy and whether, at the end, the last two candidates should be presented in the traditional way. However, there are many other little points in the report, and experience suggests that those are points that can sometimes cause as many problems—if not more—as some of the basic issues. I am not clear whether a Government motion would seek to change or regulate the way in which the Speaker is affirmed by royal approval not in the other place, but by Parliament sitting in a single Chamber up the Corridor.

Madam Deputy Speaker (Mrs. Sylvia Heal): Order. Perhaps I could remind the hon. Gentleman that he said that he did not wish to stray too far.

Mr. Grieve: It is a timely reminder, Madam Deputy Speaker. If I am getting carried away, it serves as a warning and illustration to the Minister that some recondite issues may excite hon. Members. Our constitution reflects an important historical perspective and, bearing in mind the nature of society and the role of the House and of Parliament in general, they would want those issues addressed. However, I do not know what the Government are going to table.

Mr. John Hayes: The issue has a direct bearing on the debate. It is impossible to make a judgment about the suitability of the length of time that we will have to debate the issue unless we have a clearer idea about what the Government intend


the motion to contain. If they do not intend to debate all the issues that my hon. Friend raises, there may well be sufficient time. However, I fail to understand how we could have enough time for a more general debate on the detail that is necessary to satisfy the House.

Mr. Grieve: My hon. Friend is correct. He touches on the central issue.
It is unfortunate that the matter is being discussed at such a late hour, when many right hon. and hon. Members, especially after last night's late sitting, have no doubt decided that the call of their beds takes priority over our business. When the Minister has heard the arguments—I shall listen with care to his response—he may wish to consider withdrawing the motion and presenting it again when the Government's proposals have been tabled. That would allow them to gauge our response. Once they have an impression of our reaction, they will be better placed to decide the time that should be devoted to the motion.
I am sure that the Government take the matter seriously. If they decide that many right hon. and hon. Members want to participate in the debate to express their views and influence others, they may want co consider allowing more time. They may also want to allow amendments to be considered so that there are other options. I know not. I am not trying to complicate the issue; I am simply trying to explain that it could become complicated. If the Government do what I suggest, they may discover that the matter can be dealt with reasonably expeditiously while allowing time for their business to be transacted on the same day and enabling people to go away with the impression that they have had their say and are broadly satisfied with the result.

Mr. Bercow: I detect that my hon. Friend comes at the matter, and the motion specifically, completely—or largely—unsighted. Does he agree chat although in no sense under a formal obligation to discuss the matter in advance, it might have been a parliamentary courtesy or propriety for the Parliamentary Secretary to discuss it through the usual channels, thus reflecting the spirit of the issue, which is pre-eminently a matter for the House rather than the Executive to determine?

Mr. Grieve: May I remind my hon. Friend that the Minister is always a model of courtesy? We know that that is true both inside and outside the Chamber. I would certainly not wish to criticise the Minister. Of course, the first date on which the Speaker's election is likely to be relevant to the House will fall after the general election. Obviously, I can speculate only remotely on whether there is any link between the imminence of the election and the decision to lay the motion before the House and allow it to discuss the report of the Select Committee on Procedure. Who knows? The Minister may care to enlighten us on that when he comes to reply to the debate. That would certainly make it far more informative.
That said, we are clearly unsighted, as my hon. Friend the Member for Buckingham (Mr. Bercow) said, because we do not know what the motion will be. We are simply being asked to agree the procedure beforehand. I do not intend to labour the matter further.

Mr. Hayes: I can see that my hon. Friend is trying to deal with the matter as concisely as possible. However, he omitted to raise an important issue relevant to our debate—the public's expectation of how we should go about the business. There was a good deal of public debate after the election of the current Speaker, which centerd on the conduct of affairs of the House. The wider public, not just hon. Members, expect us to debate the matter thoroughly and fully when it comes before the House. They will gain a poor impression of the House if we deal with it in a cursory fashion. I invite my hon. Friend to make that point before the Minister replies, as that view is shared by many people outside the House.

Mr. Grieve: I agree entirely with my hon. Friend, who makes an exceptionally good point. He is quite right; enormous interest was generated by the election of the Speaker. Subsequently, there was enormous press coverage and a great deal of criticism of our procedure. When we discuss whatever motion the Government introduce and whatever amendments are tabled and accepted, we must expect a great deal of public interest and attention.

Mr. Bercow: I do not wish to labour the point. However, to amplify the intervention of my hon. Friend the Member for South Holland and The Deepings (Mr. Hayes), will my hon. Friend confirm that our concern is not merely with the debate that ensues in the immediate aftermath of the election of the Speaker, important though that is, but with the wider medium and long-term issue—namely, the fact that the Speaker effectively performs a critical ambassadorial role for the House?

Madam Deputy Speaker: Order. The hon. Gentleman is wandering far and wide of the remit of the motion.

Mr. Grieve: I shall resist the temptation offered by my hon. Friend to go too far down the road of exploring the Speaker's ambassadorial role, save to agree wholeheartedly that there are a multiplicity of issues relating to the Speaker's election and role which hon. Members have close to their hearts and which they wish to be considered.

Mr. Hayes: I have no desire to wander anywhere—neither far nor wide. I want to be specific about the nature of the debate. My point was not a wide point. It was a narrow point. The wider public will look at this debate and the judgment that we make now about the amount of time that we allocate—

Madam Deputy Speaker: Order. The hon. Gentleman is repeating points already made during the debate. The motion is clearly about timetabling.

Mr. Grieve: As I said before I gave way, Madam Deputy Speaker, I do not intend to labour the matter further. After 25 minutes of debate, we have covered, albeit at a slow pace, a number of pertinent issues relating to the wording of the motion. How on earth can the House do justice to the matter when the substantive motion will have to be dealt with in two and a half hours at best? The time allocated is not enough. We therefore cannot support the motion.

Mr. Crispin Blunt: Here we are again, with a motion on the Order Paper inviting us to limit the time for debate, possibly to as little as an hour and a half, if a substantive statement is made on Thursday 22 March. We do not have the terms of the motion that we will be invited to discuss on that day, relating to the election of a Speaker. The Minister said that the motion would endorse the second report of the Select Committee on Procedure, but that report is not a single, take-it-or-leave-it set of recommendations. There are choices to be made, such as the question whether there should be a secret ballot or an open ballot for the election of the Speaker.
Those are fundamental choices. I expect that hon. Members will come to the House without having made up their minds before they listen to the debate. The subject is one that the House should properly consider. On the single question whether the ballot should be secret or open, a variety of views was received by the Select Committee from members of all parties, each of them offering a different prescription. This is not a party issue.
The matter cannot be decided on the basis of a simple motion tabled by the Government. There must be consideration of the motion, which lends itself to substantial debate. Unusually in the House, that debate would have the capacity to change people's minds or to allow them to make their minds up according to the discussion that they hear.
Without knowing what motion the Government will table for Thursday, we cannot agree to tonight's motion, which would end discussion at 4 o'clock on Thursday. The Minister referred to the precedent of 1972, when the House took only an hour and five minutes to discuss the procedure for the election of Speaker. I draw attention to the conclusion that the Committee reached in paragraph 44(iii). It stated:
The 1972 system is based on the assumption that the Government of the day and the 'usual channels' will operate behind the scenes in order to present the House with a single candidate, or at most a choice between two or three. Since at least 1983 it has become clear that this assumption is no longer correct. It is clear that the House is no longer willing to entrust the choice of candidates to the party machines. This means that (except in the special circumstances of the start of a Parliament when the sitting Speaker has been returned to the House) multi-candidate elections are likely to become the norm.
That demonstrates how the debate has changed. There was no controversy about the system in 1972. Indeed, it appears from the Committee's conclusions that there was a degree of trust that the usual channels would produce the correct candidates, probably because there would be only one, two or perhaps three options. In the election of our current Speaker, however, there has been a wholesale change. I think that that is a good thing, as it might suggest that the House is beginning to get up off its knees in its relationship with the Executive. It is good also in respect of the interaction of the two Front Benches.

Mr. Bercow: You have just reminded us, Madam Deputy Speaker, of the narrow terms of the motion, on which everybody accepts your guidance. With that in mind, does my hon. Friend agree that the central point of issue, which we invite the Parliamentary Secretary to take

on board, is that the nature and extent of the debate for which the motion provides will be crucial not only to the credibility of its outcome, but to its perceived legitimacy?

Mr. Blunt: I agree thoroughly with my hon. Friend. It is easy for hon. Members to think of halcyon days when the House was independent of the Executive—

Madam Deputy Speaker: Order. Once again, I remind hon. Members of the narrowness of the debate and the motion.

Mr. Blunt: I am very aware of the terms of the motion, Madam Deputy Speaker, but it is important for arguments to be advanced on the time scale that it proposes. The Parliamentary Secretary told us that an hour and five minutes was sufficient in 1972. He was asking us to accept that as much as an hour and half—or two and half hours, if there is no substantive statement—is unheard-of generosity on the part of the Executive.

Mr. Tipping: If the hon. Gentleman will forgive me for saying so, I did not use any of those words.

Mr. Blunt: But the implication—

Mr. Tipping: There was no implication either.

Mr. Blunt: I am happy to accept that the Parliamentary Secretary was not implying the suggestions to which I referred. However, his body language during the debate has given me some hope—it did so especially as he listened to the points made by my hon. Friend the Member for Beaconsfield (Mr. Grieve)—that our arguments are persuading him to accept that the time scale to which the motion refers, which extends until 4 o'clock on Friday 22 March, might not be sufficient in the light of the complexity of the issues. If that is the case, I do not know what he will do in the time that is available. As my hon. Friend the Member for Beaconsfield said, Opposition Members will oppose the motion. I do not know what the Government can do if they accept that it allows insufficient time.

Mr. Hayes: Will my hon. Friend confirm that our point about credibility relates specifically to the timetable issue? If we do not allow sufficient time for the election of the person who personifies its credibility and legitimacy, hon. Members and the wider community will not regard the House and the lonely office of Speaker with the reverence that they deserve. Is not that a critical aspect of the timetable motion, as people will expect the House to give proper time and attention to its own affairs?

Mr. Blunt: If only people did regard the House with some reverence. I fear that it is not held in the highest regard outside. The reaction to the current proceedings for the election of a Speaker rather confirm that that is the case, certainly in respect of the response of the media and commentators.

Mr. Geoffrey Clifton-Brown: It is a great pity that we are discussing this important matter at this time of night. Does my hon. Friend agree that we are discussing whether sufficient time is being given for debating the method of electing a future Speaker, when


the issue should be whether we should have a timetable motion at all? This is an important matter on which the House should be able freely to express its views, to the extent that it wishes. This is not an appropriate matter for a timetable.

Mr. Blunt: My hon. Friend has made an essential point. This is, by definition, completely a House of Commons matter. It is outrageous that the Executive should table this motion to limit the amount of time, in principle, and also that they should seek to limit it to such an extraordinary extent.
We have just been through the process of an enormously controversial election of a new Speaker, which has generated this report. Given the report's recommendations and the fact that no, sitting Speaker has been challenged since 1835, there should be no great rush to put the provisions in place before a general election on 3 May, if that is what is determining the Government's motion to constrain discussion of the matter.
This is an immensely important issue, and the views of Members of the House on the matter should not be constrained by an absurdly limited amount of time for debate. We should have the opportunity for our opinions exhaustively to be canvassed. The Procedure Committee has done that, to a degree, in the questionnaire that it sent out. However, that questionnaire, and the responses to it, raised as many questions as it provided answers. The Committee has made the best possible stab at a solution. It has not produced a completely prescriptive solution that would lend itself to a yes or no decision on the basis of the recommendations that it received. Some form of multi-option motion will be put before us.

Mr. Clifton-Brown: I shall put this question in as unpejorative a way as I can. Does my hon. Friend agree that if this overbearing Executive carry on constantly producing these timetables, particularly on matters such as these, which are House of Commons matters on which Members may vote freely according to their diktats, they will ultimately bring the House into disrepute? Does he also agree that the public will, ultimately, not have the regard that they should have for their Parliament?

Mr. Blunt: My hon. Friend brings me to the context in which this debate is taking place. I hope that we have made the case on its merits as to why one and a half or two and a half hours are insufficient time for debate on this matter. That is because it is a House of Commons matter, because of the complexity of the debate, and because of the inability properly to canvass opinions of hon. Members in that abbreviated time.

Mr. Hayes: The motion is about the length of time that we shall have to debate the matter, and also about the time when it will be debated. We have not yet focused on that second point. It might be more appropriate to debate the matter in a new Parliament. Given that we face a likely general election—I put it no more strongly than that—it is possible that the new Parliament with many new Members, very many of them Conservatives, rather than the old one, should decide about the election of its Speaker. It seems odd to be debating this matter at the

end of an old Parliament rather than at the beginning of a new one, given that we are talking about a significant change of procedure.

Mr. Blunt: That is the point that I was trying to make. We could face a general election on 3 May, so perhaps the motion is being rushed through so that the House can agree to the new recommendations before prorogation. I understand that the House may prorogue on 5 April to meet the deadline for a 3 May election, with the Prime Minister seeking a dissolution from Her Majesty on 28 March.

Madam Deputy Speaker: Order. Once again, I must remind the hon. Gentleman that we are discussing a particular timetable for a particular motion.

Mr. Bercow: On a point of order, Madam Deputy Speaker. My hon. Friend the Member for South Holland and The Deepings (Mr. Hayes) has raised an interesting point in debate and has expressed his opinion about what would be the appropriate procedure in a new Parliament. May I seek your guidance on the constitutional position? Let us assume that the Government do not accept his suggestion, but take the view, entirely reasonably and properly perhaps, that the procedure should be determined in this Parliament. Would you be good enough to confirm whether a subsequent Parliament could revoke that judgment?

Madam Deputy Speaker: Each Parliament is sovereign.

Mr. Blunt: The date in the motion—22 March—is important to our discussion. There has been wide speculation as to the date of the general election, when the Prime Minister will seek a dissolution from Her Majesty and when the House will prorogue to meet the deadline for a 3 May—

Madam Deputy Speaker: Order. I must remind the hon. Gentleman that there is no mention in the motion of a date for any general election. Once again, will he please confine his remarks to the motion?

Mr. Blunt: I accept your ruling, Madam Deputy Speaker, although I am slightly puzzled as to why it is not possible to discuss the context in which the motion has been tabled.

Mr. Clifton-Brown: On a point of order, Madam Deputy Speaker. The motion refers to a specific date—22 March. I seek your guidance. Surely it is in order to consider that date in the context of a forthcoming election.

Madam Deputy Speaker: A passing reference is acceptable, but the hon. Member for Reigate (Mr. Blunt) was beginning to debate the issue.

Mr. Blunt: You are correct, Madam Deputy Speaker, although I was trying to debate the context of the motion, which must be considered in respect of the wider


reputation of the House. We are being invited to accept the motion without knowing the content of the substantive motion to which it refers. That is unacceptable.

Mr. Hayes: Does my hon. Friend agree that it has emerged that—in your words, Madam Deputy Speaker—each Parliament is sovereign? We know that a Parliament can last a maximum of five years, so if we debate the matter according to the Government's suggested timetable, this Parliament's judgment on the election of a Speaker will last a maximum of about a year. Given that it is highly unlikely that we shall elect a new Speaker, the next Parliament will be saddled with rules agreed by this Parliament under which it will have to elect its Speaker. Indeed, it may want to change those rules, so debating the matter today according to such a timetable is nonsense. Let us wait until we have undertaken full consideration and discuss it in the next Parliament, which can take a view as to whether it wants a new Speaker.

Mr. Blunt: I profoundly disagree with my hon. Friend. The procedures and precedents established in previous Parliaments govern how we operate. It is perfectly proper to discuss the matter thoroughly in this Parliament and to set out the procedures for which future elections of Speakers. We must do that at some stage and there is no reason why it should not happen on 22 March. However, there is every reason why the debate should not be limited to perhaps an hour and a half.

Mr. Bercow: Rarely do I dissent from what my hon. Friend the Member for South Holland and The Deepings has to say, but does my hon. Friend the Member for Reigate (Mr. Blunt) agree that, at least on this occasion, there is a lacuna in his argument? There is an important distinction between constitutional impropriety—the existence of which my hon. Friend is, I think, wrongly suggesting—and the anti-social character of a debate held at this late hour. The latter may be undesirable, but in fairness to the Government—it irks me to be fair to Ministers—there is nothing constitutionally improper about it.

Mr. Blunt: I agree with my hon. Friend.
The point I want to make relates to the context in which the motion appears, in relation to similar motions tabled by the Government. It raises an important issue concerning the reputation of the House and its ability to do its job properly.
I am a member of Standing Committee F, which has been considering the Criminal Justice and Police Bill. Motion 67 relates to action that my right hon. Friend the Member for Maidstone and The Weald (Miss Widdecombe) and three other Conservative Members felt it necessary to take because of the curtailing of discussion of that important measure, which contains 130 clauses.
When the Government presented timetable motions relating to Committee stages, Third Readings and so forth, we had at least seen the Bill, because it had been published and had received a First Reading; but when the motion relating to this Bill appeared on the Order Paper, the Second Reading debate had not taken place and the Government were not in a position to change the

motion—to be taken immediately after Second Reading—to make some sort of allowance for the interest expressed on Second Reading and the controversy generated about the importance of the issues involved.
I think that the Government are making a profound mistake. I say that in all seriousness to Ministers, and to the deputy Chief Whip. This is not some silly point to be made at 1.30 am. I sincerely believe that to restrict debate on the process by which we are to elect a Speaker to, possibly, an hour and a half, in the context of the curtailing of debate on the Criminal Justice and Police Bill—that is one example, but it is now happening to every piece of legislation—is extremely deleterious to the reputation of this place. We are not doing our job as legislators or as scrutineers either of legislation or of the Executive, because the Executive are using their majority to prevent the rest of the House from doing that. The motion is another example—a most unfortunate example—of the Government's tendency to want simply to drive legislation through.
This is a House of Commons matter. The Executive should not be trying to limit time in such a way. I hope—although I am not sure that it is possible—that at some time and in some way the Government, if they have listened to the debate, will conclude that it is over-egging the pudding to expect the whole House to debate the election of a Speaker during a period of between one and a half and two and a half hours.
We have been much criticised in respect of our conduct of Opposition day debates. The Opposition Front Bench has sometimes decided to split Opposition days into two three-hour debates, to highlight two separate issues. In the case of home affairs debates, for instance, the result has been that the Home Secretary and the shadow Home Secretary have managed to take half the debate between them. Once the two Front-Bench spokesmen have summed up, precious little time has been left for Back Benchers on either side to participate. That is what happens when debate on an individual issue is limited to three hours. I believe that it has been a mistake to use Opposition time in that manner. It has prevented us from addressing, at length and with full Back-Bench participation, the issues that we wish to raise. Similarly, in this motion, the Government are saying that we shall have at most two and a half hours for debate.

Mr. Hayes: I appreciate that my hon. Friends the Members for Reigate (Mr. Blunt) and for Buckingham (Mr. Bercow) do not share my desire to have such a broad debate, over quite such an extended time, on the matter. However, I think that we agree that the matter goes beyond the usual conduct of Government business and the usual guillotining of Government legislation. The motion and this debate have hit a much deeper and richer vein—the very business of Parliament. That is a matter of legitimate public concern and requires a full and thorough debate. I believe that, perhaps typically, my hon. Friend is understating the case.

Mr. Blunt: I am grateful to my hon. Friend.
I note that the motion has been tabled only by the Leader of the House. I am sure that that was a deliberate decision, as the motion deals with a House of Commons matter. I ask the Minister to convey to her our belief that it is not sufficient for her, as Leader of the House,


to propose such a short time to consider such an important matter. I therefore hope that, before we divide on the motion, the Government can find a way of reversing their position on the matter. I profoundly believe that the Leader of the House should find a way of doing so, and I hope that the Minister will tell her that.

Mr. John Hayes: I do not wish to detain the House unduly on this matter. In fact, I had not intended to speak in the debate.

Mr. Bercow: Will my hon. Friend give way?

Mr. Hayes: I must make a little progress, if my hon. Friend will bear with me.
I have become animated, not to say angry, as I have listened to the debate. I do not want to use hyperbole, but I believe that the motion is more than simply another example of the Government abusing their position so as to curtail proper debate on their business. I believe that the motion is about curtailing the rights of hon. Members on both sides of the House who want to express a wide range of opinions on the matter. We know from the election of the current Speaker—who is a very good Speaker—that hon. Members on both sides of the House hold a variety of views on the subject. We also know that the election of the Speaker is important both to the House and to the public. As I said in a brief earlier intervention, the public would judge us harshly if we were to deal with the matter in a cursory fashion.

Mr. Bercow: Entirely inadvertently, I am sure, my hon. Friend has traduced me. Does he accept that full debate on these important matters and debate in the next Parliament should not be regarded as mutually exclusive? It is even entirely possible to envisage a comprehensive and perhaps even leisurely debate on the matters being conducted before this Parliament concludes.

Mr. Hayes: That may indeed happen. My point is that a general election may be imminent—I do not want to get into a debate on the date of the general election—and it would be bizarre for this Parliament to agree a procedure for the election of the Speaker that would then be foisted on a new Parliament, which may be very different in its composition from this one. It might contain a different range and set of views.

Mr. Deputy Speaker (Mr. Michael Lord): Order. We are simply debating whether the amount of time indicated in the motion is appropriate.

Mr. Hayes: I accept your guidance, Mr. Deputy Speaker, but are we not also debating the date on which the motion should be discussed? My point is that the time allocated is inadequate, and that the motion may be set for debate on the wrong date. It may not be appropriate to debate it next week, as the speculation is that we may be coming to the end of this Parliament. My point is that it might be appropriate to have a wider, public discussion of the implications of the Procedure Committee's report, as happened after the election of our current Speaker. That should be followed by a thorough and full debate in the House.
Neither the time allowed on the day by the Government, nor the timetable that they have set, allow for full public debate or proper exploration of the matter before a possibly imminent general election. A curtailed debate, a limited timetable in the House and inadequate wider discussion among the general public, who will have views on the report, would be followed by a general election. An earlier occupant of the Chair suggested that the new Parliament would be sovereign and entitled to debate the whole matter again. There is therefore a legitimate point to be made about the date set for debate of this matter, as well as the time allocated for its discussion.

Mr. Clifton-Brown: Will my hon. Friend give way?

Mr. Hayes: Yes, but I am due to be evangelising my party's cause at 8 o'clock in the morning. I do not want to be much later going to bed.

Mr. Clifton-Brown: I am sorry to keep my hon. Friend up for another 30 seconds, but I wonder whether he has considered an important point. The motion is in two parts, and they are different in their application. The first part does not protect debate, and so the Government can put as many statements on before it as they choose. I hope that the Minister will indicate whether any statements will be scheduled for that day. The second part of the motion protects the debate to be held on the private business regarding the Kent County Council Bill and Medway Council Bill. Would not it be reasonable for the Government to allocate greater time for the first section of the motion?

Mr. Hayes: My hon. Friend's intervention was so convoluted—untypically, as he always speaks with great acumen and lucidity—and my own desire for bed and cocoa is so great that I cannot deal with it—

Mr. Clifton-Brown: Will my hon. Friend give way?

Mr. Hayes: Yes, but my hon. Friend must do better this time.

Mr. Clifton-Brown: I am conscious of being censored by my hon. Friend, but there has been so much hilarity and barracking in the Chamber that I have not been able to address the point seriously. However, I do not understand why my hon. Friend fails to grasp the point that the first part of the motion is very different from the second part.

Mr. Hayes: I think that it was G.K. Chesterton who said that people who have the impatience to interrupt the words of others seldom have the patience to choose good words of their own. I do not want to ascribe that fault to my hon. Friend, but he is right to suggest that we might end up with only an hour and a half in which to debate the motion. The matter is profoundly important, and it stimulates a variety of views across the Chamber. To have so short a time for its discussion is inadequate and scandalous. The seriousness and breadth of the Committee report is such that I suggest that many right hon. and hon. Members will want to contribute to the debate. We will be faced with a situation that I have seen before in my short time in the House in which right hon. and


hon. Members will seek to catch your eye, Mr. Deputy Speaker, and will be disappointed. Not only will they be disappointed but their constituents and others will feel that they have not had an opportunity to make their views known properly.

Mr. Bercow: My hon. Friend is making a cogent point. Did he notice a moment ago that when he suggested that many right hon. and hon. Members might wish to contribute to this important debate in future, hand gestures from the Deputy Chief Whip appeared to cavil at that suggestion? Will my hon. Friend accept from me that there is a great difference between a debate at 1.40 am, resulting necessarily in a relatively modest attendance, and debate at a proper hour on a normal working day of the House, which would probably attract a great deal of interest from right hon. and hon. Members on both sides of the Chamber?

Mr. Hayes: I suspect that such a debate would attract not only full attendance in the Chamber but a good deal of public and press attention. Indeed, I am convinced of it. I suggest that it would also be one of the more interesting debates in the Chamber from the perspective of the wider public. Unusual views would be expressed, and I suspect that those views would cross the party divide. We have had a taste of that in the debate that followed the election of the Speaker.
It seems unwise of the Government to curtail debate with this timetable motion. I have known the Minister for many years; we have known each other man and boy—well, almost. I know him to be a reasonable and decent man. I suspect that he wants the matter to be explored in the most extensive manner. I do not know whether he has been pushed into this, but it is unwise of the Government to curtail debate in this way because I think that the public will judge them harshly for so doing.
The debate is proposed to take place on the wrong date and at the wrong stage in the Parliament. There is certainly not enough time in which to debate the issues. As my hon. Friend the Member for Cotswold (Mr. Clifton-Brown) said with regard to the detail of the motion, the nature of the private business to be debated that day and the pressure that it puts on other business on the Order Paper renders the time allocated for debate on the election of a Speaker even less suitable. It is a bit of a pig's breakfast—a dog's dinner. [Interruption.] The Deputy Chief Whip laughs. It is a testament to the House that we can deal with this matter with a degree of good humour, but there is a serious point at stake.
The Speaker is in many ways the personification of the House's legitimacy.

Mr. Bercow: The embodiment.

Mr. Hayes: The embodiment and the personification. I do not think that the two are mutually exclusive. The way in which we elect the Speaker is therefore critical to that legitimacy. The way in which we debate that election is itself of great importance. That is why it is not simply the debate that will take place in a week's time which will attract public scrutiny but tonight's debate on timetabling that important business.
If the House ceases to take itself and the election of its Speaker seriously, I suspect that it will cease to be taken seriously. It is not too late to think again about this. We know that the motion as such has not been laid before the House so there is a certain amount of flexibility. It is not too late to think about the wider consultation and discussion that might take place on the Procedure Committee report before the House considers it.
I appeal to the Parliamentary Secretary, given our long and friendly relationship, to consider the matter again, take on board the comments made from what are, as I think that he will agree, some of the rising stars on the Opposition Benches, and do what I am confident that he will feel to be right: allow the fullest and fairest discussion of the matter when it comes before the House by relaxing the restriction that he is seeking to impose on us this evening.

Mr. Geoffrey Clifton-Brown: I wish to argue one clear, simple case, which I was unable to get across to my hon. Friend the Member for South Holland and The Deepings (Mr. Hayes), and to secure a concession from the Parliamentary Secretary on the timetable motion.
As I said in an intervention on my hon. Friend, the timetable has two parts. The first relates to the debate on the mechanism by which we are to elect a new Speaker. The second protects debate on private business—not private Member's business—and relates to the Kent County Council and Medway Council Bills.
The two parts of the motion are worded differently. The first does not name the length of the debate, but merely states that proceedings shall be brought to a conclusion by 4 pm. As my hon. Friend the Member for Beaconsfield (Mr. Grieve) said, if we have a business statement, a private notice question and another ministerial statement, we might have only one or one and a half hours in which to debate a matter that is critically important for the House—how it is to elect its next Speaker.
We do not know when those proceedings may be brought into effect—it might be in the next Parliament or the following Parliament. Nevertheless, these are critical and important matters for the House. To have them timetabled for only one and a half hours seems highly unsatisfactory. I wonder whether I can wring this concession from the Parliamentary Secretary: that we will not have any ministerial statements on that day. If he cannot give us an answer now, perhaps the business managers will consider it before 22 March. It is not within the Parliamentary Secretary's gift to control private notice questions, because those are in the gift of the Speaker, who will perhaps have heard what I have said.
It is wholly unsatisfactory that we should have such a short time in which to debate the first matter when the second part of the motion protects three extra hours of debate, over and above the time that is taken on any preceding votes. Often, timetable motions provide that time for debate should include the votes.
On the one hand, the Government and the business managers are being very generous to the private Bills, but on the other they are being very parsimonious about the amount of time that they are allowing for debate on this other important matter. The Parliamentary Secretary has


been nodding. I hope that my proposals will be seriously considered and, on that basis, I need not detain the House any longer.

Mr. Tipping: We have had an interesting debate that has focused on time and the timetable, which have been high on the minds of Opposition Members. They are concerned about when the general election will be held. I do not blame them. When one looks at the opinion polls, the phrase, "Lord, make us chaste, but not yet", comes to mind. I hear the Opposition saying. "Lord, give us a general election, but not yet, because we face real difficulties."
I will not be drawn on those matters.

Mr. Clifton-Brown: Will the hon. Gentleman give way?

Mr. Tipping: No. I will deal with the hon. Gentleman's question in a minute.
The hon. Member for Beaconsfield (Mr. Grieve) was described, uncharitably, as being unsighted. Let me make it clear to hon. Members—I am unsighted as to the date of the general election.
The hon. Member for Beaconsfield was not unsighted about the report of the Procedure Committee. He has clearly read it and knows that the election of a Speaker is an evolutionary matter. I noted his comment that the 1972 election was radically different from the current state of affairs. Hon. Members who have considered the report will realise that things have changed dramatically at various points over time.
The issue before us is clearly one of time and timetabling. Three substantive points were made. There has been some fair criticism that the motions were not laid before the House. I remind hon. Members of what I said in my opening remarks; the motions will be laid shortly. The hon. Member for Reigate (Mr. Blunt) takes a close interest in when motions are laid, so I shall not make him a commitment that the motions will be laid today, tomorrow or the next day. They will, however, be laid shortly—certainly in good time for Members to consider them and to table amendments.

Mr. Blunt: The misfortune is that the motions were not available before this debate, because we are trying to make a judgment about the time for their debate. The substantive point is not about the motions, because I am sure that the Minister will put them before the House as soon as he can.

Mr. Tipping: I shall do so. There are motions in existence, but they need a little more polishing and refining. As the hon. Gentleman said, this is not a take-it-or-leave-it matter—there will le choices. As I said earlier, the only issue that divided the Committee was open and closed voting. An amendment will be tabled to enable the House to make a choice on that matter.
That brings me to the central point. Hon. Members have noted the great variation of view on this matter. Certainly, there is some variation, but what struck me when I read the Committee's report was the degree of consensus that had emerged—it voted on only one matter. One of the Committee's members is in the Chamber—my hon. Friend the Member for Upminster (Mr. Darvill).
The Committee has provided a firm framework within which the House can discuss the matter. The motions that we table will mirror as closely as possible the recommendations of the Procedure Committee. I make that point directly to address those hon. Members who challenged me on the matter.
In fairness to the hon. Member for Beaconsfield, he is right to note that the time for debate will be limited. We heeded the advice of the Committee on that matter—especially the fact that its Chairman had asked for an early debate to be held on the election of a Speaker. Hon. Members referred to the various demands on the time of the House, so I am pleased that we have had the opportunity to arrange an early debate on the matter.
It is conceivable that the time for the debate could be restricted—hon. Members have said that it could be only an hour and a half. I got the point made by the hon. Member for Cotswold (Mr. Clifton-Brown), although I did not understand some of his points—I think that some of his colleagues had difficulty in understanding them. He asked me to try to ensure that the time was not eroded by statements and private notice questions. Of course, private notice questions are a matter not for me but for the Chair. However, I heard what the hon. Gentleman said and we will do our best to protect the time available. That is not an absolute guarantee: we will do our best.
That desire to protect the time—

Mr. Bercow: The hon. Gentleman is as mellifluous as ever.

Mr. Tipping: Emollient, I think—[Interruption.] Give me some more—I am on a roll. However, with a Whip and a former Whip sitting on the Treasury Bench beside me, I had better make some progress.
The Procedure Committee has given us a good basis to work from. It has provided a consensus. Every effort will be made to lay the motions as quickly as possible. They will mirror as closely as possible the Committee's report.
I have heard the plea of the hon. Members for Cotswold and for Beaconsfield that we try not further to erode the time available. I simply remind the House that, back in 1972, this debate was concluded in an hour and five minutes. Although we have not had the opportunity to discuss the substance of the report tonight, we have already spent a longer time examining these issues.

Question put:—

Mr. Deputy Speaker: I think the Ayes have it.

Hon. Members: No.

Division deferred till Wednesday 14 March, pursuant to Order [7 November 2000].

Orders of the Day — High Hedges Bill [Money]

Queen's recommendation having been signified—

The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Mr. Robert Ainsworth): I beg to move,
That, for the purposes of any Act resulting from the High Hedges Bill, it is expedient to authorise the payment out of money provided by Parliament of—

(a) any expenses incurred by the Secretary of State in consequence of the Act; and
(b) any increase attributable to the Act in the sums payable out of money so provided by virtue of any other Act.

The Government support the private Member's Bill promoted by the hon. Member for Solihull (Mr. Taylor). It brings relief to thousands of people in England and Wales who feel that their quality of life is blighted simply because they cannot persuade their neighbours to cut their hedges to a reasonable height.
The Bill gives people the opportunity to refer disputes to their local authority, which will consider whether the hedge is causing a serious problem. Local authorities are given powers in appropriate cases to require the owners of hedges to cut them to a reasonable height and to ensure that they do so. It also provides rights of appeal to the Secretary of State against the decisions of local authorities.
The main costs of the Bill will fall on local authorities. The Department of the Environment, Transport and the Regions estimates that it will cost it some £2 million to deal with the backlog of about 10,000 existing cases spread over a period of three years. Thereafter, we expect the case load to drop considerably. Those costs will be met, in part at least, by fees paid by the complainants. Transfer of resources to the revenue support grant settlement will cover any shortfall.
The Secretary of State intends to delegate his appeal functions entirely to the planning inspectorate, assuming that 20 per cent. of cases go to appeal—in other words, 2,000 cases over the initial three years. That could amount to a cost of £2.1 million. Demand is then expected to fall when the backlog has been cleared.
I hope that the House will support the motion.

Mr. Christopher Chope: The Government seem to have money to throw around on this matter, so why did the Department of the Environment, Transport and the Regions today tell one of my constituents, a business man who has appealed against his business rates levy, that his appeal could not be heard until February 2003? I imagine that the reason is that the Government are saying that they have not the resources to allocate to business rates appeals. I am talking about people

who are engaged in business, trying to make money despite all the difficulties and regulation that are imposed on them by the Government.
The Minister comes to the House tonight and says that the Government have £4 million available. Why are they choosing to spend it on high hedges rather than on enabling business men to get a timely resolution of their rating appeals? The Minister knows that, pending an appeal, the full rates demanded must be paid, despite the fact that the gentleman in question might win his appeal in two years' time. The Government say that they have this spare money to spend on high hedges. Why cannot they spend more money on speeding up the rating appeal process?
The Minister underestimates the number of cases that will arise under the Bill, if it ever reaches the statute book. An enormous number of people have complained about their neighbours' high hedges. Under the wide definition used in the Bill, any two conifers, not deciduous trees, planted close together amount to high hedge and could result in a complaint being made and the local authority being involved, and so on. I should be interested to know why the Minister thinks that that will result in only about 10,000 cases, given that our constituency postbags suggest that a very much larger number might be involved.

2 am

Mr. Robert Ainsworth: The hon. Gentleman seems to suggest that there is no a real problem, but that flies in the face of half the comments that he has made and the fact that Conservative Front Benchers support the measure. A very real problem exists for many people, but there is no proper way forward for them. The courts are not adequate to deal with the size of the issue that they face, and the measure could provide a solution to that problem. I am surprised that the hon. Gentleman can say, on the one hand, that we are throwing money around—effectively wasting it—and, on the other, that we have massively underestimated the problem, which could be much bigger than he thinks.
There was a consultation process, to which not only members of the public, but a large proportion of local authorities responded. A national organisation has been working on the problem for some time, so some reasonably serious estimates of the size of the problem exist, and our estimates were changed as a result of the consultation.
The hon. Gentleman raises an issue affecting an individual constituent. He cannot expect to deal with it at this time of night, his having given me no warning of it, so I do not intend to do so.

Question put and agreed to.

Orders of the Day — SITTINGS IN WESTMINSTER HALL

Order read for resuming adjourned debate on Question [31 January.]
That, following the Order [20th November 2000], Mr. Nicholas Winterton, Mr. John McWilliam, Mr. Barry Jones and Frank Cook be appointed to act as additional Deputy Speakers at sittings in Westminster Hall during this Session—[Mrs. McGuire.]

Question put and agreed to.

Orders of the Day — Delegated Legislation

Order read for resuming adjourned debate on Question [28 February.]

The Parliamentary Under-Secretary of State for the Home Department (Mr. Mike O'Brien): I beg to move,
That the Motions in the name of Mr. Secretary Straw relating to the Electoral Commission shall be treated as if they related to instruments subject to the provisions of Standing Order No. 118 (Standing Committees on Delegated Legislation) in respect of which notice has been given that the instruments be approved.
Under the Political Parties, Elections and Referendums Act 2000, we are required to set the remuneration of the electoral commissioners. The motion will do that.

Question put and agreed to.

Orders of the Day — DELEGATED LEGISLATION

Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees and Delegated Legislation),

LOCAL GOVERNMENT FINANCE

That the Local Government Finance (England) Special Grant Report (No. 75) (HC 228), which was laid before this House on 8th February, be approved.

That the Local Government Finance (England) Special Grant Report (No. 76) (HC 233), which was laid before this House on 15th February, be approved.—[Mrs. McGuire.]

Question agreed to.

Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees and Delegated Legislation),

TRANSPORT

That the draft British Waterways Board (Limit for Borrowing) Order 2001, which was laid before this House on 15th February, be approved.—[Mrs. McGuire.]

Question agreed to.

Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees and Delegated Legislation),

EDUCATION

That the draft School Standards and Framework Act 1998 (Amendment of Schedule 18) (England) Order 2001, which was laid before this House on 26th February, be approved.—[Mrs. McGuire.]

Question agreed to.

Orders of the Day — EUROPEAN COMMUNITY DOCUMENTS

Motion made, and Question put forthwith, pursuant to Standing Order No. 119(9) (European Standings Committees),

ANIMAL BY-PRODUCTS

That this House takes note of European Union Documents Nos. 12648/00, a draft Council Regulation laying down the health

rules concerning animal by-products not intended for human consumption, and 12646/00, a draft Council Directive amending Council Directives 90/425/EEC and 92/118/EEC as regards health requirements for animal by-products; and supports the Government's objective of achieving a revised Regulation to protect animal and public health whilst ensuring that controls are proportionate to the risk they are designed to address.—[Mrs. McGuire.]

Mr. Deputy Speaker (Mr. Michael Lord): I think the Ayes have it.

Hon. Members: No.

Division deferred till Wednesday 14 March, pursuant to Order [7 November 2000].

Orders of the Day — LIAISON COMMITTEE (SUB-COMMITTEE)

Motion made,
That Standing Order No. 145 (Liaison Committee) be amended as follows:
Line 31, at end add—
'( ) The committee shall have power to appoint a sub-committee, which shall have power to send for persons, papers and records, to sit notwithstanding any adjournment of the House, and to report to the committee from time to time.
( ) The committee shall have power to report from time to time the minutes of evidence taken before the sub-committee.
( ) The quorum of the sub-committee shall be three.'.—[Mrs. McGuire.]

Hon. Members: Object.

Orders of the Day — SCIENCE AND TECHNOLOGY COMMITTEE

Order read for resuming adjourned debate on Question [31 January],
That the Select Committee on Science and Technology shall have leave to meet concurrently with any committee of the Lords on science and technology or any sub-committee thereof, for the purpose of deliberating or taking evidence, and to communicate to any such committee its evidence or any other documents relating to matters of common interest—[Mrs. McGuire.]

Hon. Members: Object.

Orders of the Day — SELECT COMMITTEES (JOINT MEETINGS)

Motion made,
That Standing Order No. 152 (Select committees related to government departments) be amended as follows:
Line 40, before the word 'European' insert the words 'Environmental Audit Committee or with the'.
Line 50, before the word 'European' insert the words 'Environmental Audit Committee or with the'.
Line 52, at the end insert the words:—
'(4A) notwithstanding paragraphs (2) and (4) above, where more than two committees or sub-committees appointed under this order meet concurrently in accordance with paragraph (4)(e) above, the quorum of each such committee or sub-committee shall be two.'—[Mrs. McGuire.]

Hon. Members: Object.

Orders of the Day — Miners' Compensation (South Wales)

Motion made, and Question proposed, That this House do now adjourn.—[Mrs. McGuire.]

Mr. Alan W. Williams: I apologise to my hon. Friend the Minister for calling him to the House at this very late hour, but the circumstances were well beyond my control and that of other Labour Members.
I am grateful to Mr. Speaker and the authorities here for allowing me the opportunity of an Adjournment debate on the levy imposed on miners' compensation settlements by the south Wales area of the National Association of Colliery Overmen, Deputies and Shotfirers—NACODS. When the High Court found in favour of the miners in its historic decision of January 1998, I was delighted for the hundreds of thousands of former miners across Britain. I represent a coal mining area, so I am fully aware of the lung disease and ill health of former miners and I was delighted by the immediate acceptance of Government responsibility by our then Minister for Energy and Industry, who is now the Minister of State, Foreign and Commonwealth Office, my hon. Friend the Member for Leeds, West (Mr. Battle).
The legal action had been brought by the south Wales area of NACODs and, over the succeeding weeks and months, I had every regard for Bleddyn Hancock, its general secretary, for his work and achievements despite his active support for Plaid Cymru, the Welsh nationalist party.
On 24 September 1999, a constituent, Mr. Tommy Williams of Glanamman, came to see my in my surgery. Now aged 70, he is a former miner and has been an active member of NACODs since 1958. He told me that, along with about 200 other members of the south Wales area, in the early 1990s, he had volunteered £800 to finance the legal action and to be screened to be one of the eventual test cases. Now that the legal action is over and costs have been reimbursed, he wants his £800 refunded as was originally promised.
Mr. Williams had attended a recent branch meeting about his own compensation claim and was asked to sign a form to pay a levy for his eventual settlement. The declaration concerned NACODS acting on his behalf in all matters involving the claim and the agreement concluded:
I further agree to contribute 5 per cent. as a paid up member and 10 per cent. as a non-paid up member of any settlement figure that I may receive to NACODS to assist with the costs of settling my claim.
Mr. Williams refused to sign and felt that the union was wrong in imposing the levy. The legal action was over, and there was no new major cost in processing his claim.
Mr. Williams was also bitterly critical of Mr. Bleddyn Hancock. I had not met Mr. Williams previously, but he is a member of the Labour party and deeply resented Mr. Hancock's incessant attacks on the Labour Government, accusing them at every juncture of bad faith in processing the miners' claims. I raised these matters with NACODS nationally in a letter to Peter McNestry and I was very surprised to learn that the south Wales area had ceded from the national union in June 1998.

NACODS nationally had no levy, but charged £50 administrative costs for successful claims in industrial injury actions.
I then took up Mr. Williams's case with Mr. Bleddyn Hancock. After three or four robust exchanges of correspondence, there was no progress. Mr. Hancock vigorously defended his union's right to impose a levy on every individual that it helped, despite the fact that it was a class action involving thousands of claimants.
In a conversation on 13 January 2000, Mr. Williams quoted a settlement just agreed for a fellow NACODS member. The award was for £150,000 less a clawback of £5,000, giving £145,000. The levy of 5 per cent. would then give the union £7,250.
On 29 March 2000, I wrote to the certification office for trade unions and employer associations, asking it to investigate the above matters and for copies of recent annual reports for the NACODS south Wales area. In those reports, the membership from 1994 to the present is listed as 45, 45, 45, 854, 45, 40 in 1999 and about 30 today. I was staggered to find that the south Wales area of NACODS is such a tiny trade union. Mr. Bleddyn Hancock is regularly described as a south Wales miners' leader, as if he were the equivalent of Dai Francis or Will Paynter. The army that he represents is a mere shell of a trade union, with just 30 working members. The anomalous figure of 854 members for 1997 may represent retired miners.
Over the next six months, the certification office conducted a detailed informal investigation under the powers of section 37A of the Trade Union and Labour Relations (Consolidation) Act 1992, as amended. As a result of its investigation, the £800 initially paid by Mr. Williams was reimbursed last May. On the more general question of the NACODS levy, the certification officer, Mr. Whybrew, took a fairly dispassionate view and decided not to appoint inspectors for a formal investigation. In his last letter to me, dated 19 October 2000, he said:
In passing I note the Association accepts that members seeking compensation need not make use of the union services to claim that compensation. I understand that where members, including lapsed members, are unwilling to give an undertaking to pay the levy, they are free to seek such support from elsewhere or to process the claim themselves.
Sadly, that is the position of my constituent, Mr. Williams. On 16 May 2000, Mr. Hancock wrote to him, restating the arguments for the levy and inviting him to leave the association. After 40 years as a loyal and active member of NACODS, that is Mr. Williams's decision.
I turn now to a 25-minute television programme, "Dragon's Eye", shown on BBC 2 Wales on Thursday 8 February this year. I had discussions with one of the presenters, Mr. Guto Thomas, during preparation of the programme. It contained considerable new material on NACODS south Wales area and the role of Mr. Bleddyn Hancock. I have the programme on video and I have carefully studied a transcript. Most of the time is taken up with a searching interview with Mr. Hancock by the presenter, Mr. David Williams.
As regards the levy, the point is put repeatedly that all the legal costs are being reimbursed by the Government, so why should members have to pay a 5 or 10 per cent. levy from their settlements? Mr. Hancock concedes that


the union could raise millions of pounds from the levy, argues that it has always been union policy and says that the money will be used to finance future legal actions.
The programme contained material, which was new to me, on the South Wales Occupational Health Project, a limited company set up by Mr. Hancock and others which involved the recruitment of thousands of miners from Yorkshire, Lancashire and south Wales for legal claims against the Government. A voluntary contribution of 7 per cent. of compensation settlements was involved, although Mr. Hancock says that the contributions were never collected, as the case was won before they were required.
The programme concluded with a lengthy cross-examination of Mr. Hancock's personal terms of employment and how decisions on his salary were reached. A study of the annual reports for 1998 and 1999 show that the general secretary's salary in 1997 was £12,158; in 1998, it was £26,950; and in 1999, it was £47,612. It doubled in 1998, increased by 80 per cent. in 1999 and increased fourfold over two years. That is for a part-time job, three days a week. I should add that Mr. Hancock receives £8,500 a year for one day a week as trustee of the miners' pension funds. In addition, form AR 21 on page 17 of the 1999 annual report gives a car allowance of £18,000. The programme also revealed an exceptional figure of a £70,000 salary for the general secretary in 1995. Those are highly eccentric salary changes, and the exchanges on those matters raised more questions than they answered.
Following transmission of the programme, the South Wales Argus, a vocal supporter of Mr. Hancock throughout the years, published an editorial on 9 February headed "End the levy, Mr. Hancock". It said:
Unfortunately, we have to disagree with Mr. Hancock about the levy. We feel it is now unreasonable.
Its original purpose was to finance the court battle—a cause bravely fought and rightly won.
But since the government has picked up the legal bill for NACODS' High Court victory we feel it is no longer justified for the union to be taking a slice of the compensation cake.
It concluded:
his union is still doing something that even his national president Sean O'Neill has described as an irregular practice adding that their function was to win compensation, not make money out of it.
I want the Department of Trade and Industry to consider the matters carefully and the Minister to ask the certification officer to appoint inspectors to conduct an investigation under powers in section 37(1)(b) of the Trade Union and Labour Relations (Consolidation) Act 1992.
Let me summarise my concerns. First, is it right that NACODS south Wales area charges a 5 or 10 per cent. levy on compensation settlements when NACODS nationally and the National Union of Mineworkers have no such levy? I understand that a levy may be reasonable at an individual level if there is an accident or injury at work, but this is a class action involving 100,000 claimants. The union is not involved in further litigation; it is merely helping solicitors to process individual claims, the costs of which are fully reimbursed. The levy is simply being used for a windfall gain. It is immoral to take money from miners' pockets.
Secondly, how were decisions reached on the 5 and 10 per cent. levy? Mr. Hancock claims that the levy has always been union policy, but south Wales area NACODS

only ceded from the national union in June 1998. Why did the south Wales area split from the national union? The 5 or 10 per cent. formula was introduced for individual personal injury claims. There should have been fresh discussions on its application to something as uniquely large as the chest disease settlement.
I understand that only working members have a vote; retired members have no vote. Is it right that a small handful of people—just 30 working members—impose the 5 per cent. levy on 1,000 to 2,000 retired members who have no vote? Lapsed members also have no vote, but are asked to contribute 10 per cent. of their settlements. Should not the old maxim "no taxation without representation" apply?
Thirdly, what is the role of solicitors in the administration of the levy? At my surgery on 24 September 1999, my constituent, Mr. Williams, told me that he had received an interim payment of £2,000 from his solicitors, Hugh James and Co of Merthyr Tydfil. Before they made payment, he was required to send a cheque for £100—the 5 per cent. levy—to NACODS. It appears that Hugh James was acting in such a way as to enforce the levy. Is that the company's general practice? If so, it is effectively aiding and abetting the enforcement of the levy. Is that ethical? I thought that a solicitor was meant to act directly on someone's behalf, but it appears that there is an odd arrangement between that firm of solicitors and south Wales area NACODS in the collection of the levy. Is that legal and proper?
Fourthly, what is the money for? South Wales area NACODS has only 30 working members, but has about 2,000 retired and lapsed members. It is expected that compensation settlements may average £20,000 each. If there is a 5 or 10 per cent. levy, the total income will be a windfall of more than £1 million. Indeed, Mr. Hancock concedes that order of magnitude in the television programme. What is the money for when there are only 30 working members and two members of staff?
Fifthly, the salary arrangements for the general secretary have given eccentric results. Are there proper accountable procedures? If there is a windfall of revenue due to that tiny trade union, the certification officer must be satisfied that there is proper decision-making apparatus.
Finally, south Wales area NACODS and Mr. Bleddyn Hancock, its general secretary, have rendered a terrific service to all miners through their High Court action. That action is now behind us. The Government are delivering due and proper compensation to miners and their widows, and reimbursing solicitors and trade unions for all their legal costs. The levy is therefore improper and cannot be justified. As the South Wales Argus said on 9 February, "End the levy, Mr. Hancock".

The Minister for Energy and Competitiveness in Europe (Mr. Peter Hain): May I congratulate my hon. Friend the Member for East Carmarthen and Dinefwr (Mr. Williams) on securing this debate? He is an excellent Member of Parliament and I hope that he will be rewarded at the next election with re-election with a good vote from his constituents. He has carried the torch of justice for miners and is now shining a bright light on what we both believe is an indefensible irregularity.
I agree that we should all acknowledge the part that south Wales area National Association of Colliery Overmen, Deputies and Shotfirers played in achieving justice for miners in winning compensation for respiratory disease through the courts. It was a long battle against the previous Conservative Government and British Coal, and south Wales area NACODS deserves credit for spearheading it. The association certainly incurred legal costs in that fight, but they have been and are being met in full by the Government.
I want to see all the compensation due to miners going to them. The elderly, the seriously ill and the widows should get their money in full. That is their right; justice for all of their suffering demands nothing less. I must make it clear to the House that the Department of Trade and Industry, since we assumed the liabilities of British Coal, has been responsible for meeting all the trial costs not only for respiratory disease litigation, but for vibration white finger as well. The House may not be aware that, to date, the Department has paid out over £14 million in trial costs alone to the six firms of solicitors that brought proceedings against British Coal, one of which was funded by NACODS. That firm alone received a significant proportion of the £14 million paid out in costs. Discussions are continuing with the solicitors and we anticipate making further post-trial costs payments shortly. There should be no significant on-going risk to NACODS of having to meet costs in individual claims. The Department has agreed with the miners' solicitors fixed rates of payments for all successful claims, which are intended to cover all solicitors costs.
The agreed costs for most successful vibration white finger claims will be in the region of £600 plus VAT and reasonable disbursements, although in some cases the costs are dealt with on the merits of each case. For respiratory disease, the agreed costs per successful claim range from £500 for chronic bronchitis-only claims to more than £2,000 for chronic bronchitis and emphysema claims that have gone through the full medical assessment procedure.
The level of costs will also depend on the complexity of the case. For example, where the disputes procedures have been invoked or where complex special damages are being claimed, extra solicitors fees have been agreed. A full breakdown of the costs paid to solicitors is available in the handling agreements for both diseases, copies of which are in the Library.
So far, £31.8 million has been paid to solicitors handling these claims. The total bill could be in excess of £250 million. Nobody has suggested that solicitors are short-changed. No one has complained to me about the level of the fees. We have also agreed to pay costs towards the care and maintenance of all claims that were registered before June 1999, regardless of whether they are ultimately successful. In addition, the Department is meeting all the costs of the medical assessment process, including spirometry testing, records collection and the respiratory specialists' time.
We have made it clear that we do not intend to recover any of these costs where the claimant is unsuccessful. Recovery of such costs by defendants is usual in personal injury litigation. The risks to the costs of solicitors and other legal representatives in handling claims under the

claims handling agreements is therefore low, and covers only the administrative work that they need to complete for claims that are ultimately unsuccessful.
I know that claims handlers will charge a success fee—a fixed percentage of the total compensation—much as NACODS does, for handling claims. The Department has been keen to ensure that claimants know that they can pursue their case through a solicitor without such a success fee being taken from them. Solicitors are not able to do that, as the cases are still proceedings before the court. Claimants should not have to pay success fees to anybody.
I firmly believe that the compensation paid by the Department should go to the claimants, without any third party taking a slice of the compensation. Of course, if claimants want to give some of their compensation as a donation to their union in recognition of the support that they have received in pursuing their claim, that is up to them.
The south Wales region of NACODS needs to examine its conscience if it is taking what could be substantial sums intended as compensation for the suffering miners. I understand that no other British region of NACODS takes such a slice of the compensation. The south Wales National Union of Mineworkers certainly does not, and I pay tribute to its general secretary, Wayne Thomas, for the work that he has done in securing justice for retired miners and their widows.
As my hon. Friend mentioned, the Trade Union and Labour Relations (Consolidation) Act 1992 provides powers for the certification officer to investigate the financial affairs of unions. However, the certification officer is an independent statutory authority and it would be wrong for the Government to interfere in his handling of individual cases. I cannot therefore write to the certification officer on this matter.
However, if any claimant wishes to make a complaint about a union financial matter, the certification officer is required to consider whether to appoint an inspector. I would therefore encourage any claimants who are experiencing difficulties to contact their solicitor or, if they do not wish to do so, their local citizens advice bureau in the first instance.
I have spent the past six weeks questioning and re-examining previous decisions and proposals, and I was delighted on 2 March when the Prime Minister announced in Swansea that we were extending fast-track and interim offers to more than 6,000 claimants. That will mean that £30 million of compensation for widows and asthma victims will be brought forward and offered quickly. That is, of course, on top of the 33,000 payments already made, totalling more than £125 million. In fact, we have now paid out more than £360 million in vibration white finger compensation throughout Britain. In Wales, £60 million has been paid. Those figures are significantly greater than the recent coal subsidy and the regeneration money paid by the previous Conservative Government at the time of the 1992 pit closures. Some £1 million is already being paid out each day on those two major schemes, but it does not stop there. I am continuing to explore ways in which we can extend interim payments even further.
Progress is being made, but it is not good enough and not quick enough for those who have suffered the tragic loss of loved ones. In the past two weeks, we have agreed with miners' solicitors on the handling of compensation


for pension loss. That was one of the first matters that Bleddyn Hancock of south Wales NACODS raised with me, and £400 million in funding is available for that purpose. That is the last piece in the jigsaw, which means that full and final offers of compensation will be made in the next few months.
Of course, compensation can never be released quickly enough when people are suffering as many miners are. We need to bear in mind the fact that, with fresh claims coming all the time, there could be significantly more than 150,000 claims to settle. About l,000 claims a week are still being received. We will continue to seek every means we can of reducing further delays, but that will require the co-operation of all parties. For my part, I shall ensure that the elderly and most injured are seen first. We are also prioritising widows who are claiming on behalf of their late husbands.
On vibration white finger, progress continues to be good. To date, we have settled nearly 21,500 claims and made a further 25,350 interim payments. In total, we have paid more than £235 million in compensation on vibration white finger. In Carmarthenshire, almost £2 million has been paid to 500 people. That is increasing week by week. I am delighted that claimants will see further progress in the next few months. They have a right to expect it.
As my hon. Friend rightly said, it is the Labour Government who are delivering, while others—I refer especially to Plaid Cymru—try to exploit the suffering of miners' families, widows and communities. We are delivering the programme and we expect all parties, including Plaid Cymru, to co-operate, to provide constructive criticism where it is appropriate and to make positive suggestions, which will be taken on board, as they have been previously. What matters is justice to miners and their families, widows and communities,

which is why the Government have made available more than £2 billion to fund justice for miners who have suffered long years of ill health.
I have seen the need for such help. My constituent, Mr. Ken Herdman of Seven Sisters in the Dulais valley, Neath, is trapped at home. He is stuck in his front room, his bathroom, his living room and where he sleeps. He cannot go outside for walks like the rest of us. When he walks the few yards from his front room to his bathroom—something that we would do without even thinking about it—he has to stop to catch his breath. After he has returned from the bathroom, he takes up to half an hour to recover. All the time, his wife cares for him and is hovering in the background. It is to such long-suffering miners that the Government owe a debt. We are repaying that debt and will continue to do so.

Mr. Alan W. Williams: My hon. Friend vividly described a miner in Seven Sisters in his constituency. In the light of that description, does he agree that it is unjust that the miners' own trade union is clawing back 5 per cent. of the compensation settlement as a levy? We have heard Mr. Hancock say a lot about clawback and how wrong it is that it applies to some individuals. However, with regard to the union, all individuals are required to pay 5 per cent. of their settlement as a sort of compulsory clawback.

Mr. Hain: I regard that as unjust. The justice and full compensation should go to the people concerned, such as those whom my hon. Friend represents so ably in his constituency.

Question put and agreed to.

Adjourned accordingly at twenty-six minutes to Three o'clock.